A recent study of Americans' buying habits from LIMRA found 20 percent of consumers looking for life insurance products sought out information from their employer, while 75 percent of workplace shoppers bought life insurance.
The study showed 30 percent of workplace shoppers for life insurance products only bought life insurance because it was available to them through an employer-sponsored benefits program. The study's results indicate more people are turning to their employers to get financial products. The convenience of accessing financial resources at work, as well as a feeling of security with employer-sponsored programs, are both drawing consumers to purchase from their workplace. In terms of life events spurring consumers to consider life insurance, a change in marital status or having a child are the top reasons why shoppers are seeking financial information in the workplace.
The study showed workplace shoppers for life insurance are 55 percent male and 45 percent female, with more than 75 percent married or living with a partner. The majority of workplace shoppers have children under the age of 18, and the consumers tend to be younger than those shopping for life insurance through other channels. These shoppers also have higher average incomes than other shoppers, with more investable assets.
When consumers sought out life insurance in the workplace, 80 percent felt their producer provided good information about the policy, and 75 percent felt they could trust the life insurance provider. However, nearly half of workplace shoppers said the life insurance provider failed to follow-up with them regarding their policy, and 40 percent did not feel their provider considered their personal budgets when selecting a life insurance plan for them. Further, more than one-third of workplace shoppers felt they did not receive enough product options when making a purchase.
Discussing ways providers can improve their products or services, the study recommended providers ensure consumers fully understand all aspects of the products while they are browsing, as workplace shoppers tend to be younger with less financial planning experience. In addition, LIMRA suggested life insurance and employers provide additional life insurance and product information during the decision-making process and follow-up with shoppers after the purchase is complete.
“We were surprised to see so many workplace shoppers feeling that they needed more follow-up from the sales rep, which was a significantly higher percentage than we found for consumers who shopped through other channels,” said Kim Landry, analyst at LIMRA group product research. “Our behavioral economic research indicates that consumers may need time to consider their decision and, as our study found, if we don’t follow-up with them, we may be leaving money on the table.”
As more employees are seeking life insurance and financial planning advice and products through their employers, it is important for companies to provide valuable information to these shoppers as they prepare.
A recent study showed U.S. employees have lost confidence that employees will have enough retirement assets when they leave the workplace to live comfortably in the golden years. The study found only 4 percent of employers are very confident in their employees' retirement savings strategies, down from 30 percent in 2011. Further, just 10 percent of employees are very confident their employees are taking the accountability needed to ensure retirement success, and 18 percent are confident their employees can manage their retirement income.