Younger clients prefer income to a lump sum payment

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A survey has found that many people under the age of 40 would prefer to receive life insurance benefits as monthly income rather than in a lump-sum payment.

 

In LIMRA's recent study on life insurance product design, four out of ten consumers under the age of 40 indicated that they would prefer to receive a monthly income benefit while about three in ten favoured a lump sum payment. The research organization also points to its 2016 Insurance Barometer, which revealed that 61% of all consumers own life insurance to replace lost income, and 44% said they own life insurance to supplement retirement income. These percentages are higher among Millennials and Gen X consumers, notes LIMRA.

 

 

7 out of 10 interested in buying a policy

 

In addition, the survey asked respondents how they felt about policies that could be adjusted to fit different stages of life: 7 out of 10 expressed interest in buying a policy that could change with their needs, and one third said they were either “very” or “extremely interested” in one. About half of the most interested prospects had children, and the same proportion said they already have some life insurance coverage but believe they are underinsured.

 

“Our research suggests that products offering monthly income would have strong appeal among younger and middle class consumers and could be a way to more effectively reach them,” comments Scott Kallenbach, director at LIMRA Strategic Research. “People often buy coverage that fits their needs at the time of purchase. But as children age, debt obligations fluctuate and income levels change, a death benefit that was once sufficient could become outdated in only a few years.

 

As Published in The Insurance & Investment Journal by Andrew Rickard June 23, 2016  11:33 a.m.

 

If you have a beneficiary under age 40 and want to explore your options to leave your life insurance benefits as monthly income rather than a lump sum, or if you are under age 40 and want to understand how a life insurance policy can change with your needs, talk to us at Four Points Financial Solutions by calling 1-866-235-0004 today.