Last year, LIMRA’s survey of consumers’ economic confidence discovered the majority of people felt negatively about the economy. This years results are largely the same. In the midst of this uncertainty and negativity, financial professionals will need to identify areas where life insurance can provide confidence inspiring consistency.
As consumers’ opinions on the economy remain stagnant, their feelings toward the financial services industry have become more positive. That’s a continuation of last year’s trend, but sentiment remains lower than it was prior to the financial crisis. Even as they use consumers’ uncertainty to connect with clients, financial professionals need to understand they are rebuilding trust with many consumers. Pragmatic and helpful advice will re-establish financial professionals as crucial parts of consumers’ financial plans.
Overall sentiments are steady
While consumers’ economic sentiments shifted during the past 12 months, they have settled in a place that’s remarkably similar to their position last year during the same time. Although more than 50 percent of people view the economy unfavorably, there are differences in people’s opinions based on demographic factors. Older consumers are more likely to view the economy in a negative light, while their younger counterparts are generally more optimistic.
That split may have something to do with older individuals’ proximity to retirement. If people have seen their savings impacted by recent economic turmoil and feel unprepared for retirement, they might be more prone to negative feelings about the economy.
This negativity is not necessarily an issue for financial professionals, who should specifically target individuals who feel upset about the economy’s direction. Consumers generally have faith in life insurance providers, so there is probably still room for ample growth in this industry.
People feel good about life insurance
Prior to the recession, 23 percent of people claimed to have “quite a bit” or “an extreme amount” of confidence in insurance brokers. Today, 20 percent of consumers say the same, and that represents a 3 percent rise from a year ago. Overall, people have more faith in life insurance than other types of insurance. That should give producers confidence that they are a trusted resource for consumers. While people have had their belief in all financial products shaken, life insurance is still something that people believe should be a part of their portfolio.
Restoring economic confidence through insurance products
Many of the people who are not feeling positively about the economy are probably nursing concerns about retirement savings. These individuals may be able to benefit from life insurance products that provide sustained and consistent income. Annuities are one option, but permanent life policies that give consumers the option to accumulate a significant amount of money that they can utilize may be an even better option. Particularly given that so many consumers are worried about their financial situation, the tax benefits and flexibility offered by life insurance is likely to be appealing.
By emphasizing to consumers the lack of contribution limits and the different ways that life insurance policies can be leveraged, producers can provide a counterbalance to economic uncertainty.
According to a Merrill Lynch retirement study, family members are much more likely to rely on high net worth individuals for support. Given the current economic climate, many of these consumers may be wondering how they will properly provide for their loved ones. Life insurance provides the solution and should offer these consumers the peace of mind they seek. Financial professionals should focus their outreach on communicating the value offered by life insurance to these consumers and others who are worried about where the economy is headed.