An Interactive Deep Dive Into Young Affluent Professionals Insurance Behaviors A Zeldis Research Associates Report

Transcription

1 An Interactive Deep Dive Into Young Affluent Professionals Insurance Behaviors A Zeldis Research Associates Report July 15, 2014 Presented by Fred Gaudios Senior Project Director fred@zeldisresearch.com x206

2 What We ll Cover Bulletin Boards What Are Bulletin Boards? Positives and Advantages Observing the Discussion Our Interactive Deep Dive Methodology Current Insurance Profile Needs/Perceptions Purchasing Behaviors Agent Relationship 2

3 Online Bulletin Board Discussions

4 Online Bulletin Boards Online Bulletin Boards are an online qualitative research methodology Online Bulletin Boards typically run anywhere from one to five days; different sets of questions are asked each day Can be used one time or with the same group for multiple discussions over time (forum or mini-panel) Participants are pre-recruited and asked to: Log in to a secure website Respond to in-depth qualitative questions Log in multiple times per day, at their convenience, and encouraged to respond to probes, follow-ups, and other participants comments 4

5 Positives of Online Bulletin Boards ADVANTAGES WHEN TO USE Convenience Reduce costs including travel and incentives Increase participant reach: no need to worry about hard-to-reach respondents or geography Hear from more respondents - everyone is heard, not just the strongest voices Time to think = better insights Ability to show wide variety of stimuli (Images, PDFs, Video, Websites) Observers can communicate directly with moderator Ability for respondents to upload Polling to add a quantitative element to your research Pure and simple, it s fun! Engaging topic Hard to reach/specialty populations Geographically dispersed populations Qualitative testing: products, concepts, positioning, marketing materials, ads, websites/online tools Attitude and usage Trends 5

6 Observing The Discussion The flow of the discussion is easy to understand, and there are notifications for new responses. Initial question Participant reply Follow-up probe Reply to probe 6

7 The Present Research Young, Affluent professionals 23 young affluent professionals completed an online study hosted by itracks in May 2014 Aged Household income $100k+ $150k+ if 35 or older Full-time employed 7

8 Methodological Note Two day bulletin board (May 6-7, 2014) Day 1: Questions created by Zeldis Day 2: Questions submitted by conference attendees Crowd-sourced 8

9 Current Insurance Profile

10 Life Insurance Purchasing Channel Through Employer Agent/Broker Direct (11 responses) I purchased through my employer because it was easy. It's just a payroll deduction. I bought it from my employer. They have a benefits desk where we select what we want. (9 responses) It was through a broker that carries my car insurance and health insurance as well. It was easy to understand my options and make a final decision. (8 responses) I purchased the life insurance directly from an insurance company. Directly from an insurance company is convenient and comfortable. 10

11 Bulletin board participants are slightly more likely to have term, vs. whole, life WHOLE We wanted whole so it would also accrue in value, and it seemed right to start it early for the kids. I went with the whole life insurance as that is for my entire life, and it invests my money which can be helpful for my future. I picked whole life because it builds cash value, and I own it once premiums are paid in full. It can be borrowed from if ever needed. Term vs. Whole Life 10 4 Term Whole DK 13 TERM I picked term because of the cost. I included the convertible rider, so that when I got to a better monetary situation, I could convert to whole life. We felt based on my age that term life insurance was the best possible decision we could make as it allowed us to have financial freedom. I have a mix of policy types because I wanted some that would build value, some that had low premiums, etc. I relied on my advisor to help me pick the right mix for my needs and my budget. 11

12 Most participants have group life available through their employer Group Life Availability 5 17 Group Available No Group Available Yes, I have basic group life insurance, but only the standard 2x salary kind that is provided free-of-charge by my company. I don't know how long I'm going to be at my current company, so I'm not bothering to purchase more than the standard provided free by the company. Yes, but it is something my union just provides (I don't think it is that much). Our individually purchased policy is the one we will really rely on. My individual policy is most important. It has the higher value. 12

13 Life insurance is part of a robust employee benefits package offered to most participants Group Benefits Offered by Employer Life Medical Dental Vision Disability (STD or LTD) Almost all consider their benefits package valuable: The benefits package is very valuable to me, and makes me consider staying with my current employer more than I would if the benefits package was more lacking. These benefits are important to our family, we have four children and healthcare can be expensive. 13

14 Life Insurance Needs/Perceptions

15 Almost all consider having life insurance very important or critical Very Important/Critical: It's very important to have life insurance because, if anything were to happen to me, I don't want my family to suffer a major financial loss. I believe now that I am married and have property and a child, it's incumbent on me to have life insurance. It's one of those things you hope you never use, but I'm motivated by the what-if scenarios to ensure my wife and child are protected financially Very Important/Critical Important Important: It is important to me, so that I know my wife and children will be taken care of financially, if something should happen to me. I think I have underplayed it - as I get older, I will probably pay more attention to it. I have generally just taken whatever is offered at work. I think it is important to have life insurance because in a time of crisis, such as losing a spouse, expenses can really pile up. 15

16 The top reasons to purchase life insurance are to protect the family and for financial security Reasons to Purchase Life Protects Family 14 Financial Security 8 Emotional Security 3 Investment Vehicle 2 I purchased life insurance because I am a single mother and I have three children. If I pass away, I want my children to be taken care of. Life insurance would help to replace my income and it would cover expenses if I passed away. I purchased life insurance to give me a sense of security and to diminish (if not eliminate) the risk factor. It is a mental and financial need to have life insurance. I purchased life insurance because I don't want my family to have to struggle financially at a time when clearly there would be grieving going on. Life insurance takes care of at least part of a sad situation. 16

17 Most opinions/perspectives of life insurance companies are positive Opinions of Life Insurance Companies I have a generally positive opinion. They help when families need it. I have a positive opinion of life insurance companies. Many life insurance companies have a good reputation, so I know I can trust them. I have a positive opinion because the products they offer help give me peace of mind Neutral/Mixed Negative Positive I don t trust them enough to keep my best interests in mind when trying to sell me a policy, as they make more money in selling different policies. I feel they do have a lot of hidden fees and some policies make more money for them than they actually do any good to the people. 17

18 To convince a friend of the importance of life insurance, many mention a need for protection If they are a couple without kids like us, I would say you need to think of the burden you or your spouse take on if one of you die and you have to pay for everything that was being paid for with two incomes, with one. We all think we will live a long life - and then some! - but we just don't know. Every year that passes increases our risk of illness related death, and accidents could strike at any time. Death is certain - you don't have to be afraid to talk about it, just be prepared as any other business action you would take for your family. Life insurance is affordable and it's worth buying. Life insurance is about taking care of the people you love. It's about keeping promises and meeting responsibilities. 18

19 In line with last year s results, many mention the birth of a child as the reason to purchase life Reasons to Purchase Life *Results from 2013 quant Had a child Got married/entered domestic partnership Lost a family member or friend 17% 30% 42% The birth of my son was the impetus for my life insurance because it was important to make sure he and my wife were taken care of. Having my first child, I no longer was just responsible for myself. Growing older, I became more focused in providing money for the future. 19

20 Others mention getting married as a reason to purchase life insurance Reasons to Purchase Life *Results from 2013 quant Had a child Got married/entered domestic partnership Lost a family member or friend 17% 30% 42% Getting married and having children caused me to think about purchasing life insurance, and critical diseases caused me to consider buying additional life insurance. Marriage was the first reason I purchased. I will add additional insurance when we start having children. 20

21 Experiencing a loss also motivates some to purchase life insurance Reasons to Purchase Life *Results from 2013 quant Had a child Got married/entered domestic partnership Lost a family member or friend 17% 30% 42% In my fourth year of my marriage, my husband drowned. He had a job that provided life insurance, but not much. I had to almost immediately find work, because once I paid funeral costs and bought a plot, there was not much left to live on. This is why I bought life insurance. I lost my father when I was 22, so I know how it feels after that. My father was a smart person and he had taken insurance and savings, which never created problems for us. 21

22 Image Collage What image(s) best demonstrate how you feel about life insurance? 22

23 Image Collage 23

24 The top images selected reflect one s family, peace of mind, and safety Mentioned by 6 I chose the image of the people who are holding each other's arms because my family is important to me and I want to make sure they have everything they need if I pass away. The hands show the need for each other and they are linked together, like the need my family has of me and my income. Mentioned by 6 The image of the meditating lady is what I would choose because it means life insurance gives you a sense of peace. You have something to fall back on when times are bad. I'll choose the image of the meditating woman. Having life insurance brings me peace of mind. Mentioned by 4 I choose the person walking over the netting. I feel like my insurance policies are a safety net for my family's future. I like the "safety net" photo. That's my view of life insurance. Something to keep my survivors from crashing to the ground financially. 24

25 Though life insurance is considered important, very few participants think about it often Almost all consider their life insurance a set it and forget it type product. I do not think about my life insurance policy frequently. I am always busy, so its a set it and forget it type of product for me. I do review my life insurance coverage every few years though. I think about it sometimes, like when I hear someone has passed, but mostly I don t think about it often. I know I have life insurance and feel secure. I think about life insurance only if there is some seminar or information session about it or at the time of renewal. I haven't thought much about it after purchasing. I think about my life insurance when I hear of a relative or acquaintance passing away. I am satisfied knowing it's there. It's not something I frequently think about, now that I have it. I think about it less now than when I didn't have it. 25

26 While most believe their current coverage is adequate, some uncertainty exists I know my current coverage is adequate because it's more than enough to cover the cost of my mortgage, the cost of raising my son, and leave my wife with a large nest egg. I spoke with my financial advisor to come up with the right amount of coverage. I feel that the amount of life insurance I have is adequate. It would provide five years' worth of my income. I used the balance of my mortgage, plus the average college tuition, adjusted for inflation/increases over the next years. Is Your Coverage Adequate? 15 Yes No 5 3 Don't Know I don't feel the amount we have is adequate. Even though I work and make good money, it certainly wouldn't sustain my lifestyle. I am moderately satisfied with my current amount. It is enough to cover funeral expenses and have some left for the family. I do not think the current amount of life insurance is adequate. With inflation, my money will be pennies. 26

27 Life Insurance Purchasing Process

28 Life Insurance Purchasing Process 1 Meeting with agent/hr rep 2 Application process 3 Medical testing/bloodwork (sometimes) 4 Application decision Meeting with the representative was first, after the presentation looking over print outs doing a personal survey and what I can afford eventually moving on to paperwork. I called my broker, he did all the research; ed me the options we had a conference call to decide; then we apply; got a response in 15 days and I was all set. I didn't go through a rigorous process and I was able to buy it very easily as it was offered by my employer. 28

29 The most common research behaviors are internet searches and asking friends/family Did You Research? 4 19 Ways to research Internet Searches (10) I read several articles online. I visited several insurance companies online. I requested quotes online. I compared policies and quotes before making a purchase. Friends/Family (8) I only used a relative s advice. She knew the ins and outs of insurance. I've talked to my dad. He knows almost everything. Employer Resources/Seminars (3) I used all the information available through my company. The best source was the direct source. No Yes Social Media (1) 29

30 Under half report comparing companies/policies during the purchase process I did compare several companies and types of policies. My auto insurance agent was trying to pressure me to sign up with them but I didn't like or appreciate their approach. We compared quotes directly from different companies and from sites with multiple quotes (to see if they differed). Did you compare companies/policies? 9 14 Most of the work was already done for me, I just had to pick. I used only one company as my friend recommended it. I did not shop elsewhere. My advisor works with Prudential, so that was the only company we looked at. No Yes 30

31 Though only some look at online reviews before purchasing, reviews can be helpful When purchasing life insurance, did you look at any online reviews? I did review the insurance provider which my company was offering and found that the reviews are great and the rate I am getting is good. The reviews I read influenced me positively towards the company I selected because of the good things said. 8 No 14 Yes I did not read any reviews but have known friends and relatives who use this company and all are satisfied. There could be people paid to put glowing reviews of companies out there. I would possibly consider reading them, but wouldn't use them to help drive my decision. 31

32 Customer service, financial strength, and reputation are highly important in an insurance company Insurance Company Attributes # Important (5-7 on 7-pt scale) Customer service Company's financial strength Reputation of company Price/cost of products Agent/broker recommendation Familiarity with company Company progressive/"green" 15 32

33 Have you ever cancelled a life policy (or let it lapse)? 19 No 4 Yes When I was younger I had whole life policies for the whole family but money got tight and I let them lapse. But these long, term life policies are a much better option. Yes, one month I had a very tight budget and was not able to pay my premium that month. Yeah, I canceled the policy for about a year when we had to leave the US and were living overseas. 33

34 Have you ever started the research process, but ultimately did not purchase? I did some research on what I am getting outside and what I am getting through my employer, and my employer's insurance company was much better and with better benefits I ultimately did not purchase usually because of two reasons. Unsure of my money situation at the time and what was feasible financially and the other reason is that my husband really hates discussing death. No Yes I did try once with [COMPANY]. However it automatically adds your number to this awful phone spam where you get unwanted calls from insurance companies. 34

35 Possible simplifications of the purchase process include easier quotes and a shorter application They could possibly structure a "pay what you can afford" type of application process and then come up with a policy that aligns with that premium. Possible Simplifications Easier comparisons/quotes Make shorter and easier 4 Keep me informed throughout process Phone/chat support 2 Nothing/It s simple It would be nice if insurance companies provided detailed information about the policies they offer. Provide a few key points on why I should buy them and have some mechanism where with putting some details of the customer it can suggest which insurance would be the best fit for him/her. Make it easy and simple to apply and also provide live customer service to help. 35

36 Agent Relationship

37 How did you get to know your agent? How Did You Get to Know? Family/Friends 6 Previous experience with other products Through financial advisor 5 2 We were introduced to him through a friend who had previously bought life insurance from him. I think this agent did a great job at explaining the process and the various options available to us, that we bonded with him really well all the way through the buying process. She considered my personal situation and was interested in my family. That went a long way for me trusting her to provide me with the best policy based on my needs. I feel like she could be a personal friend, not just my life insurance agent. 37

38 How would you get to know your agent? How Would You Get to Know? Internet/Blogs 5 Family/Friends 4 Through financial advisor 1 I didn t buy life insurance through an agent or broker, but if I were to buy that way, I would ask my friends, Google local agents and check the reviews about reliable agents. I would ask my family and friends for recommendations. I wouldn't trust a random internet search. I would probably look for reviews online for insurance companies first, then once I found the company with rates I was comfortable, only then would I seek out an agent. 38

39 The top characteristics sought in an agent are trustworthiness and knowledge Trustworthy Knowledgeable Understands needs Reliable Communicates well I've worked with him for just about every financial step in my life so far (financial planning, wedding, first house, second house, planning for our first baby, etc.). I have complete trust and faith in him to do what's best for me. My wife's family has known this agent for some time, and I trust him. He always relays plenty of information and keeps us on top of things. We had previous experience with this agent, we bought several other insurance products from her, she seemed very knowledgeable and competent. 39

40 While a few consider their agent relationship to be point-in-time, more consider it ongoing Ongoing: If I worked with an agent, I would expect to meet with him or her in person. I would also expect to speak with them by telephone and via . It would be an ongoing relationship. Our relationship is ongoing and the amount of interaction is good enough for me. When I have questions they offer help and quality information. I'd say it is ongoing. I spoke with him in the last three months. I'm satisfied with the interactions we have Point-in-Time Ongoing Depends/DK Point-in-Time: My policy purchase was a point in time purchase. I have not spoken to my broker since the inception of my policy. I'm pleased that they don't bother me. Although he does have an "open door" attitude, I haven't talked to my agent since I purchased the policy. I expect it would be a one time thing. Perhaps reevaluate several years down the road, but I wouldn't expect to modify my insurance very often. 40

41 Agents can optimally communicate with customers by being genuine and understanding I am really not sure what they could do that wouldn't come across sounding phony to me. Whenever a friend of mine goes to a financial advisor, they are always told they don't have enough life insurance. They would have to come up with a way of making me believe they aren't just trying to sell me a product I don't need so they can make money, and honestly, I don't know how they would do that. Just something that is not a sales pitch or an upsell, but ingrains compassion and understanding of the process of life insurance and how families can benefit from using it. Show me the financial importance of life insurance, how my family will be better off in the unfortunate situation of my early demise. Make me feel like I'm doing what is best for my child. I like real-life situations, where examples help me put myself in that situation. I feel the best approach is to flat out ask people: Will your spouse and children suffer financially in the event of your death? In very simple layman terms, could they still make their mortgage and support themselves and their children as they had been accustomed to? 41

42 Questions? 42