Shopping for Life Insurance

  • Judy Faucett*  responded that people spend more time buying a microwave than they do an insurance policy.

*Actuarial Consultant to the NAIC

1994-1, NAIC Proceedings

  • 2018 1009 - NAIC - LIIIWG, Life Insurance Illustrations Working Group - [Bonk: Not in NAIC Proceedings]
    • Goal of Policy Overview
      • Birny Birnbaum (CEJ) - Shopping
      • ACLI - Not Shopping
  • 2018 - AP - A Behavioral Study of Life Insurance Purchase Decisions, by Manohar Giri - 200p
  • The key questions are who is going to buy the product and what's important to the buyer?
    • Premiums can be high or low, fixed or flexible.
    • How important is the early death benefit to the purchaser?
    • Is the initial cash value important?
    • What about safety and guarantees?
    • For universal life products, what about the interest crediting rate and cost of insurance rates?
    • Other issues may involve simplified or guaranteed issue underwriting and loan provisions. All of these features need to be balanced against one another.
  • Not all can be most favorable to the client.

--  Phillip J. Grigg, PRUCO Life / Prudential

1987 - SOA - Product Development Process -- Bringing New Products To Market Quickly And Efficiently, Society of Actuaries - 22p

  • Birny Birnbaum (Center for Economic Justice—CEJ) said he supports a uniform format for the one- to two-page consumer document and the policy and narrative summaries because some standardization is necessary to achieve the goal of Model #580, the purpose of which is to facilitate consumer comparison shopping.

2016-2, NAIC Proceedings - Life Insurance and Annuities (A) Committee, San Diego, California, August 27, 2016

  • One thought about the Moss Report is that requiring that costs for both term and whole life be provided when selling insurance products does not seem right in the American marketplace.
  • If the agent wants to do it voluntarily, that is one thing, but to have it mandated, seems to be against our way of marketing products.

-- William M. Snell, Northwestern Mutual Life and Chairman of the Wisconsin Task Force

1979 - SOA - Cost Disclosure (Moss Report), Society of Actuaries - 18p

  • (p96) - Survey evidence has consistently shown that most people do not shop at all for life insurance; they deal with only one agent. See Chapter IX.
  • (p290) - Almost twenty years ago, the Yankelovich organization, on the basis of an extensive survey, reported to the major life insurance company trade association that6....
    • Due in part to the inherent characteristics of the product, the average person feels less self-confident as a buyer of life insurance than of any major purchase.
    • Indeed, the entire act of purchasing life insurance is fraught with anxiety:
      • people are not confident about their ability to comprehend the pros and cons of alternative plans. 

1985 - FTC - Life Insurance Products and Consumer Information - 317p

  • National Association of Insurance Commissioners External Communication Plan - September 8, 1985
  • External Communication Project Rational
    • Objective - To increase awareness of state insurance departments as a primary source of consumers information about insurance products.
    • Strategy - To offer buying tips and to solicit questions on a specific insurance product. (p95) 

1986-1, NAIC Proceedings

  • EXHIBIT F - [From Dally News, Friday, Dec. 29, 1972]
  • CONSUMERS GET SHOP TALK ON BUYING LIFE INSURANCE, (By Gene Spagnoll)
    • The average consumer probably spends more time shopping for a color TV set than he does for his life insurance.
    • One reason for this, perhaps, is that it's so difficult to shop for a policy.
    • There is no such thing as an insurance supermarket where one could compare prices and other factors affecting the purchase of insurance.  (p801)

1973 0220 - GOV (Senate) - The Life Insurance Industry, Philip Hart (D-MI) - Part 1 of 4  ---  [BonkNote]

  • To get the best buy in insurance, Charlie Is going to have to shop around, talk to several agents and compare the prices and services offered by the companies.  (p802)

--  Herbert Denenberg, Pennsylvania Insurance Commissioner 

1973 0220 - GOV (Senate) - The Life Insurance Industry, Philip Hart (D-MI) - Part 1 of 4  ---  [BonkNote]

  • Mr. Foley:  ...responded that, if consumers want to compare policies, they have the illustrations to do so.

1999-4,  NAIC Proceedings