Shopping for Life Insurance

  • Judy Faucett*  responded that people spend more time buying a microwave than they do an insurance policy.

*Actuarial Consultant to the NAIC

1994-1, NAIC Proceedings

  • 2018 - AP - A Behavioral Study of Life Insurance Purchase Decisions, by Manohar Giri - 200p
  • The key questions are who is going to buy the product and what's important to the buyer?
    • Premiums can be high or low, fixed or flexible.
    • How important is the early death benefit to the purchaser?
    • Is the initial cash value important?
    • What about safety and guarantees?
    • For universal life products, what about the interest crediting rate and cost of insurance rates?
    • Other issues may involve simplified or guaranteed issue underwriting and loan provisions. All of these features need to be balanced against one another.
  • Not all can be most favorable to the client.

--  Phillip J. Grigg, PRUCO Life / Prudential

1987 - SOA - Product Development Process -- Bringing New Products To Market Quickly And Efficiently, Society of Actuaries - 22p

  • Birny Birnbaum (Center for Economic Justice—CEJ) said he supports a uniform format for the one- to two-page consumer document and the policy and narrative summaries because some standardization is necessary to achieve the goal of Model #580, the purpose of which is to facilitate consumer comparison shopping.

2016-2, NAIC Proceedings - Life Insurance and Annuities (A) Committee, San Diego, California, August 27, 2016

  • Mr. Foley:  ...responded that, if consumers want to compare policies, they have the illustrations to do so.

1999-4,  NAIC Proceedings

  • (p96) - Survey evidence has consistently shown that most people do not shop at all for life insurance; they deal with only one agent. See Chapter IX.
  • (p290) - Almost twenty years ago, the Yankelovich organization, on the basis of an extensive survey, reported to the major life insurance company trade association that6....
    • Due in part to the inherent characteristics of the product, the average person feels less self-confident as a buyer of life insurance than of any major purchase.
    • Indeed, the entire act of purchasing life insurance is fraught with anxiety:
      • people are not confident about their ability to comprehend the pros and cons of alternative plans. 

1985 - FTC - Life Insurance Products and Consumer Information - 317p

National Association of Insurance Commissioners External Communication Plan - September 8, 1985

External Communication Project Rational

  • Objective - To increase awareness of state insurance departments as a primary source of consumers information about insurance products.
  • Strategy  - To offer buying tips and to solicit questions on a specific insurance product. (p95) 

1986-1, NAIC Proceedings

EXHIBIT F - [From Dally News, Friday, Dec. 29, 1972]

CONSUMERS GET SHOP TALK ON BUYING LIFE INSURANCE, (By Gene Spagnoll)

The average consumer probably spends more time shopping for a color TV set than he does for his life insurance.

  • One reason for this, perhaps, is that it's so difficult to shop for a policy.
  • There is no such thing as an insurance supermarket where one could compare prices and other factors affecting the purchase of insurance.  <p801>

1973 - GOV (Senate) - The Life Insurance Industry - Senator Hart - 4 parts - Part 1 of 4 - [PDF-794p]

  • To get the best buy in insurance, Charlie Is going to have to shop around, talk to several agents and compare the prices and services offered by the companies.  (p802)

--  Pennsylvania Insurance Commissioner Herbert Denenberg

1973 - GOV (Senate) - The Life Insurance Industry - Senator Hart - 4 parts - Part 1 of 4 -  [PDF-794p]