Consumers believe life insurance is almost three times more expensive than actual cost

Posted on: Monday, April 30, 2012

The results of a new survey suggests agents may be able to increase their life insurance leads simply by doing a better job at communicating with their insurance customers.

According to the 2012 Insurance Barometer Study, which was conducted by the LIFE Foundation and LIMRA, consumers vastly overestimate how much a life insurance plan will cost them.

About 2,000 participants between the ages of 18 and 75 took part in the study and were asked to guess what they thought their annual premiums would be for a 20-year, $250,000 level-term life policy for a healthy 30-year-old. While the actual price is about $150, the most common response from those polled was $400. This overestimation was even higher among young adults, who believed the price was nearly seven times what it was in reality. This may have been because premiums tend to be less for young adults.

"If someone offered to sell you a gallon of milk for $10.00, you would likely choose to spend your grocery budget on other necessities, knowing that the actual cost is closer to $3.50," said Life Foundation CEO Martin Feldman. "If people think that something is too pricey, they often won't give it a second thought. The fact is, the cost for basic term life insurance has fallen by about 50 percent over the past 10 years and has never been more affordable."

Posted In: Insurance News, Life Insurance

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