A survey sponsored by the Society of Actuaries gives insurers clues about what motivates middle-income life insurance buyers.
The results come at a time when life insurance ownership by middle-income Americans is at an all-time low.
The study, conducted by WZ Research + Consulting and Mathew Greenwald & Associates, surveyed a panel of young families and found that middle-income life insurance buyers fall into three segments: "opportunistic buyers," "planners" and "protectors."
Opportunistic buyers don't strongly believe in the need for life insurance, but they will purchase coverage if an appealing offer is made to them, typically through work. They tend to have less coverage than other customers and are less likely to think their coverage is adequate. They also are less likely than customers in other segments to be the principal breadwinners or have children, and they are least likely to seek advice from a life insurance agent.
Planners are more likely than the other groups to value life insurance and buy coverage as part of a financial plan. They are willing to spend more on premiums and work with an agent to get the right type of coverage. Planners are somewhat more likely to be female, and buy life insurance simply because they think it's something they should do, the study said.
Protectors buy life insurance based on a need that arises, such as the birth of a child, versus a strong belief in the product. They tend to see life insurance as temporary, rather than part of a lifetime plan and are more likely to be interested in term life than whole life or universal life insurance. They fall in between opportunistic buyers and planners in terms of how likely they are to work with a life insurance agent and how much they're willing to spend.
To qualify for the study, respondents or their spouses had to be between ages 25 and 40, have a household income of $35,000 to $125,000 and have life insurance or financial dependents. They completed an 18-minute online survey conducted in August 2012.