For insurance agents who deal with life insurance leads, years of experience in the industry has made this type of coverage something that they're quite familiar with. But professionals shouldn't let their considerable knowledge base fool them into believing that others are just as familiar with these types of insurance products as they are.
According to a recent survey conducted by LIMRA, most Americans have a very limited understanding about life insurance and what it entails. In fact, based on a recent test that the professional development organization gave to 4,000 Americans on basic aspects of life insurance, less than one-third of test takers successfully passed and more than half - 55 percent - answered fewer than five questions correctly.
"In addition to identifying the aspects of life insurance that consumers understand and where consumers admit to being in the dark, the study also shed light on some widespread misperceptions," said Jennifer Douglas, associate director for strategic developmental research at LIMRA.
She added that agents should do their best to clarify these misunderstandings and ask their insurance customers what they're confused about.
Their financial readiness may depend on their ability to understand some of these concepts. According to a separate survey conducted by the Personal Finance Employee Education Foundation, nearly one in every three Americans is seriously in debt. Additional revenue streams that come from annuities and life insurance can help consumers address these issues.
Those who had a firm grasp on life insurance knowledge tended to share certain characteristics. For example,individuals who already had a life policy in place, were older,held advanced degrees and had a considerable amount of assets that could be invested scored well on the test.