A recent LIMRA survey found that 70 percent of American consumers cannot pass a basic, 10-question quiz about life insurance. In fact, 55 percent of 4,000 people LIMRA quizzed answered more than half of the questions wrong.
Less than one percent answered all 10 questions correctly.
Separate research shows that an important reason given by consumers for not owning life insurance is that they do not understand the products. This fact, along with the LIMRA survey results, shows that educating clients is a vital task for agents.
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According to the survey:
- 82 percent of consumers wrongly believe life insurance companies collect medical information primarily to document pre-existing conditions that can be used to avoid paying claims.
- 75 percent mistakenly think policies are canceled and policyholders lose their benefits if an insurance company files for bankruptcy.
- Only 31 percent know that beneficiaries do not pay taxes on life insurance death benefits.
Take the quiz yourself on the LIMRA website.