Amid a resurgence of cases of COVID-19 infection and prospects of further economic and financial pain, consumers are showing more confidence than ever in the life insurance industry, according to a new survey from LIMRA.
In the latest edition of its Consumer Sentiment Survey, the organization found that 41% of Americans reported having “extreme” or “quite a bit” of confidence in life insurers, marking a record high. It found a similar uptrend in sentiment for financial professionals, with 33% of consumers expressing that level of confidence in insurance agents and brokers, and 37% with respect to financial advisors.
“Other research we have done throughout the pandemic has shown how much insurers and financial professionals have done to adapt and offer digital solutions to help their customers virtually when they couldn’t meet face-to-face,” said Alison Salka, Ph.D., senior vice president and head of LIMRA Research.
Another supportive trend, Salka said, has been a growing understanding of the value of insurance coverage among consumers. Fifty-seven per cent of Americans that LIMRA surveyed in October reported feeling an increased need for life insurance.
Part of the heightened awareness surrounding life insurance has been spurred by concerns around the pandemic. However, the survey revealed that the extent of COVID-19 fears differs across party lines, as consumers identifying as liberal were more likely to say they’re “extremely” or “very” concerned about COVID than self-professed conservatives (77% vs. 44%).
“Given this dichotomy, we expect it will be challenging for policy makers and leaders to implement policies that are welcomed by both sides of the political spectrum,” Salka said.
Also challenging is the fact that one in five respondents said the recession set off by the pandemic has made buying new life insurance hard for them, up five percentage points from July; among those who already have insurance, 26% said paying for their existing coverage has been tough because of the recession, which was seven percentage points higher than in July.
LIMRA’s research found other signs of financial pain from the pandemic. Among non-retirees surveyed in October, 40% said the economic downturn has severely impeded their ability to save for retirement, compared to 37% who said the same in July. There’s also been a rise in the number of American workers who feel the recession is impacting their job security (41% vs. 33%), as well as the number of consumers worried about maintaining their housing (28% vs. 26%).
“As the country is experiencing the next wave of COVID-19 infections, more people may be recognizing that the pandemic and current economic conditions are going to persist well into 2021,” Salka said. “The financial hardships many families are facing will get harder as the recession continues.”