Posted: 9:01 p.m. Wednesday, April 24, 2013
By Brian O'Connell
NEW YORK (MainStreet) — Big insurance companies are taking an “if you can’t beat ’em, join ’em” approach to the consumer insurance market, as Americans increasingly opt to buy life insurance not directly from insurers, but while shopping for toothpaste and toasters at Wal-Mart.
That’s exactly why an insurance firm such as MetLife has joined forces with Wal-Mart — in effect, that’s where the buyers are.
So says the Life organization in its annual Life Insurance Barometer Study conducted with Limra, a insurance industry development organization.
The study says that this year 20 percent of U.S. consumers would buy life insurance from a retail outlet such as Wal-Mart or Target. The study calls retail stores a “non-traditional environment,” but certainly shoppers don’t seem to mind. Buying life insurance on a Saturday trip to a big box retailer is simply a matter of price and convenience.
“A lot of people procrastinate getting life insurance,” says Marvin H. Feldman, president and CEO of the organization. “The study showed that while the vast majority of consumers (85 percent) agree that most people need life insurance and 65 percentsay they personally need it, just 62 percent indicated that they have life insurance coverage."
"Some view the road to life insurance ownership as a complicated process. But what if that first step into life insurance ownership for these procrastinators could happen at the same time they were buying milk?”
Actually, such first steps aren’t so unusual, once you factor in the reasons why consumers would buy life insurance at a Wal-Mart.
According to the study ...
Even though buying life insurance from a financial professional is still the preferred way for consumers to buy life insurance, issues such as low cost, a simple process, convenience and a lack of pressure signal a sea change in the way Americans view buying financial products.
“While the number of consumers willing to purchase a life product through a retail outlet is not overwhelming, it certainly is worthy of note,” says Todd A. Silverhart, director of Limra Insurance Research. “In light of the novelty of the concept and that few people have actually shopped for life insurance through a retail outlet, there is likely to be considerable confusion in the eyes of the consumer as to what such a purchasing experience might entail. For carriers seeking a niche market, retail ventures could be a worthy approach.”
There is plenty of room for growth in the marketplace, as only 62 percent of U.S. consumers believe they hold adequate life insurance today. Another 45 percent say they plan on buying more life insurance this year, Life reports.
That could mean a jump in life insurance sales at big box retail stores.
“Life insurance has never been as inexpensive or easy to buy — especially with the anticipated growth of online and nontraditional purchasing channels — yet millions of consumers continue to put off the decision,” Feldman says.
With more opportunities to buy, Americans may no longer put off buying insurance — changing the life insurance industry and leading to more spouses leaving the house with these remarkable words:
“Honey, I’m going out to buy some milk, paper towels and life insurance.”