There are 19 million “stuck shoppers” of life insurance in North America, according to new research from the Life Insurance Market Research Association (LIMRA)—those who value the necessity of life insurance but who have yet to make it through the purchasing process.
Their biggest reason for jumping ship? If you listen to LIMRA and Maddock Douglas Research, it’s arcane and confusing language used by agents and other members of the life insurance industry.
“Our focus groups consistently described shopping for life insurance and other financial products as confusing, frustrating and overwhelming, which kept them from making a decision on what to buy,” said Scott Kallenbach, research director with LIMRA Strategic Research. “The words, images and messages used to explain financial products don’t seem realistic or relatable to many of these consumers.”
Agents wishing to overcome that barrier and close the deal need to aim for more “authentic communication,” Kallenbach said. That means using language that is memorable, positive, credible, relevant, down-to-earth and easy to understand.
Marketing materials are especially problematic, with many consumers reporting they didn’t understand commonly used concepts like “annuity” or “underwriting.”
In fact, nearly three-quarters of respondents said they could not define “permanent life insurance” or “underwriting,” while two-thirds were unsure of the terms “rider,” “guarantees,” “living benefit,” or “annuity.”
“Death benefits” were also a mystery.
“We had one person who shook his head and said, ‘I don’t see the benefit in my dying,’” Kallenbach told Insurance Business.
Similarly, “premium” translated as “the best” to many survey respondents, while “cash value” yielded responses like “amount it costs” or “the value of an item in cash.”
Agents will need to revamp their marketing materials, ad campaigns and even everyday conversation if they hope to make more sales, says Maria Ferrante-Schepis, managing principal for Insurance and Financial Services Innovation and Maddock Douglas.
“Authentic communications… is a major innovation opportunity if internalized by the entire culture of an insurance company,” Ferrante-Schepis said, drawing a parallel to the Dove Campaign for Real Beauty, which has made waves by challenging the ideal image of beauty and instead making it applicable to all potential consumers.
To that end, the insurance industry needs to soften its terms and concepts to make life insurance more applicable to potential clients.
