Insurance agents who take the time to explain the policy promote greater customer satisfaction.While many Americans either don’t buy life insurance or have insufficient coverage, current policyholders are overwhelmingly happy with their policies. In fact, according to a recent J.D. Power survey of more than 6,000 individual life insurance customers, customer satisfaction with it is higher than ever.
Overall customer satisfaction with life insurance achieved a score of 785 on a 1,000 point scale, an increase of 16 index points from last year. J.D. Power attributed that high rating to several factors, including a strong economy that’s boosted life insurance sales, improved customer engagement, and, most importantly, clear communication of a policy’s price-value equation through easily comprehended policies and billing statements. According to the survey, the percentage of recent buyers who said they “completely understand” their fee schedule increased by 20 points from the previous year.
As life insurers continue to offer more favorable rates, price satisfaction among policyholders has soared. The price satisfaction score surged from 747 in 2016 to 764 this year — the greatest year-over-year hike registered in the J.D. Power survey.
Perhaps because agents are taking the time to explain the intricacies of policies to newer buyers, price satisfaction among those who owned a policy for less than four years climbed 35 points. In comparison, price satisfaction rose only 13 points for policyholders who have owned life insurance for over three years.
A possible reason for this increased satisfaction with life insurance is the widespread use of discounts, especially discounts offered when buyers purchase several bundled policies. The survey’s top insurer, State Farm, offers more discounts than its industry peers and presents multiple products — including life, annuities, property and casualty policies, and banking products — that can be wrapped together for a discounted rate. A robust product menu provides agents with more opportunities to connect with clients who seek expert advice.
“When it comes to making decisions about financial products, people want to talk to a financial professional,” Gregory Hoeg, VP of the insurance practice at J.D. Power, explained to Insurance News Net.
Somewhat surprisingly, consumers were less inclined to pocket a discount if given the option to use wearable health monitors. The J.D. Power study revealed that the chance for a reduced life policy premium in exchange for using a cloud-connected device failed to significantly influence buyers.
What It Means for Agents
The J.D. Power report reinforces the importance of transparency and clarity when explaining a life insurance policy to would-be buyers. Insurance agents who fail to take the time to describe the policy’s provisions and pricing structure in easily understood terms could lose a sale and end up with a dissatisfied client, who might harm your business by spreading their negative views.
As the State Farm models shows, agents benefit by offering clients and prospects a wide selection of products that are sold at competitive prices or bundled with other policies at a discounted rate. More importantly, however, agents must illustrate the value of owning a life policy at any price.