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For more than a decade, the industry has grappled with stagnant life insurance sales and falling ownership rates. While LIMRA research shows consumers recognize life insurance is an important financial tool to help to protect their financial security, just 51% say they have coverage, down from 63% in 2011.

Although demand remains strong — approximately 100 million consumers say they need for life insurance, and half or more of them say they intend to buy each year — just a fraction of these consumers actually follow through and buy life insurance. Just 9.4 million policies were sold in 2024, consistent with policy sales over the past decade.

A recent study, conducted by LIMRA and Bain & Company, explored how life insurers can improve consumer engagement and get more people to purchase coverage.

Consumers’ Misconceptions Create a Barrier

The biggest obstacle preventing people from getting the coverage they know they need is perceptions of cost or other financial priorities. Sixty-six percent of prospects — consumers who say they need individual coverage — say they haven’t purchased life insurance because they believe it is too expensive, or they have other financial priorities. LIMRA research, however, finds that three quarters of Americans overestimate the cost of life insurance. 

Education and Engagement Are Key

Overwhelmingly, consumers acknowledge their need to learn more about life insurance before taking action. The LIMRA-Bain study finds that 90% of life insurance prospects say they need to better understand life insurance before they purchase. But only two-thirds of prospects reported taking steps to learn about life insurance.

While 30% of prospects said they browsed the website of a carrier that they are the most familiar with to learn about life insurance, prior LIMRA research finds a majority look to social media for financial information, possibly limiting a carrier’s ability to share the unique value of its products and services and guide the prospect through the process to purchase. Of those who visited a life insurer’s website for information, the study reveals just 6% moved on to request a meeting with a financial professional through that carrier.

“Carriers have a meaningful presence as the kind of port of first call where people go to get educated. But our study shows they tend to invest on top-of-the funnel marketing — building brand awareness or bottom-of the funnel marketing — working with their distribution partners,” said Andrew Schwedel, partner at Bain & Company. “The opportunity to improve engagement lies in the middle by providing more useful online content that will make life insurance more accessible and connecting them with a financial professional to help them buy a policy.”

Using Technology to Personalize the Message

The industry has long known that life events — the death of a loved one, getting married, buying a home, having/adopting a baby — drive consumers to shop and potentially buy life insurance. In this most recent study, 39% of prospects say they recognized their need for individual life insurance because of a life event. What if life insurers leveraged all of the data they collect to proactively identify people experiencing a life event and deliver personalized messages to these people? The research suggests carriers could enhance their digital marketing, using artificial intelligence and data analytics, to improve engagement at a relatively low cost.

Carriers could use the same data with predictive models to improve the lead quality for their distribution, improving the likelihood of a sale. Financial professionals surveyed said 86% of clients who consult with them about life insurance ultimately buy a policy. By building stronger consumer profiles to help identify and score warm leads, life insurers can strengthen their relationships with distribution.

The Payoff

In 2024, the industry sold just under $16 billion in retail life insurance new annualized premium and 9.4 million policies.

“If carriers do more to help educate consumers, improve lead generation and facilitate more consumer-financial professional engagement, our research suggests sales could multiply, given consumers’ expressed need and interest in buying,” said Bryan Hodgens, senior vice president and head of LIMRA Research. “Converting less than 30% of the 100 million+ adults who say they need life insurance — those most serious about buying within the next 12 months — could boost sales to over $42 billion, more than twice the current state.”

To learn more about the findings and their implications, watch the latest Industry Insights with Bryan Hodgens episode: Unlocking Growth: Carriers Improve Efforts to Engage Underinsured Consumers