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Understanding how customers trust the buying process is an essential component for any business. As online shopping shifts from desktop platforms to mobile devices, consumer interactions with their favorite brands are ripe for change.
Understanding how customers are influenced by online browsing habits of consumers as they research and purchase products can provide key insights into the digital infrastructure a business needs to properly support customer demand.
For our study, we asked nearly 2,400 U.S. respondents about their online browsing and purchasing habits to better understand the modern approach to online shopping.
Summary of the Buyer Trust and Influence Study
- 85% of consumers don’t think a phone call is necessary when purchasing online.
- A combination of free shipping and the lowest price will sway 65% of respondents into a buying decision.
- 38% of men view the lowest price as the most important factor when choosing who to purchase from online, compared to just 32% of women.
- 34% of consumers said that the vendor who fulfills their order mattered when they made an online purchase.
- While 34% of consumers are influenced by onsite customer reviews, only 22% are influenced by customer reviews found on 3rd party websites.
- 7 in 10 consumers trust online reviews.
- 74% of women trust online reviews, compared to 64% of men.
Questions:
Jump to the answer of a specific question by clicking a question below:
Trust & Selection
1. Is it important for you to speak with a company over the phone before making an online purchase?
2. What is most important when choosing who to purchase from online?
3. When purchasing through online marketplaces (Amazon, Walmart, Jet, etc.) does it matter which vendor fulfills your order?
4. Which of these is most likely to influence your purchasing decision between similar products?
5. Do you typically trust online reviews?
1. Is it important for you to speak with a company over the phone before making an online purchase?
Key Statistics
- 85% of consumers don’t think a phone call is necessary when purchasing online.
- 15% of respondents say that they want to talk to someone on the phone before making an online purchase.
Overwhelmingly, consumers don’t believe that it’s necessary to speak with a company on the phone before buying online.
This indicates that consumers planning to buy online expect all the information required to inform their purchase to be readily available to them through an online channel.
While it may be tempting to believe that 14.8% of individuals who say that it’s necessary are in older cohorts, our data suggest that these numbers are similar across all demographics.
Business owners entering the e-commerce market should be aware that consumers who lack the required information may not contact the company for additional discovery. They may simply move on to a competitor who offers the information they need and make their purchase elsewhere.
2. What is most important when choosing who to purchase from online?
Key Statistics:
- 35% of respondents said that price is the most important thing when choosing who to purchase from online.
- 30% of consumers view free shipping as the most important factor when choosing an online vendor.
- Lowest price is the most important thing for respondents when choosing who to purchase from online.
- A combination of free shipping and the lowest price will sway 65% of respondents into a buying decision.
- Only about 20% of online consumers said that services like return policies and customer support were a determining factor when choosing who to purchase from online.
- 1 out of 10 respondents views expedited shipping as a determining factor when choosing who to purchase from online.
While shopping based on price was the most common response (35%), nearly the same number of consumers (30%) said that free shipping was a major consideration when selecting a vendor during online purchases.
Based on our research, offering both the lowest price and free shipping resonates with a combined 65% of respondents.
It is feasible to conclude that a company may benefit by choosing the cheapest shipping option, rather than pay extra for fast shipping.
If competing on price is difficult, companies may also benefit from cutting costs on shipping, return policies, and customer service staff in favor of rock bottom pricing and free shipping due to buyer preference and broad market appeal.
Gender Demographic Highlights
Males: Men find lowest prices to be most important in choosing who to purchase from when shopping online.
Females: Females find free shipping to be most important in choosing who to purchase from when shopping online.
Key Statistics:
- 38% of men view the lowest price as the most important factor when choosing who to purchase from online, compared to just 32% of women.
- 35% of women consider free shipping as the most important factor when choosing who to purchase from online, while only 24% of men feel the same way.
- Men are most likely to view the lowest price as the most important factor when choosing who to purchase from online while women are more likely to view free shipping as most important.
According to our results, men and women have different views in terms of the factors involved when choosing who to purchase from.
The demographic breakdown provides huge opportunities for gender-targeted e-commerce businesses. While generating income based on the above data may still require some fine tuning, the roadmap is clear: Men prioritize the lowest price while women favor free shipping options.
From a strategic standpoint, the best option for online businesses targeting women is to offer free shipping. When targeting men, simply offer the lowest price.
Following these guidelines may create buying signals in the consumer shopping experience, which translates to greater long-term profitability.
3. When purchasing through online marketplaces (Amazon, Walmart, Jet, etc.) does it matter which vendor fulfills your order?
Key Statistics:
- 54% of consumers don’t care which vendor fulfills their online order when purchasing through online marketplaces.
- 34% of consumers said that the vendor who fulfills their order mattered when they made an online purchase.
- 13% of consumers aren’t familiar with how online marketplace vendor relationships work.
Online marketplaces have done a good job of making fulfillment partners follow the terms and conditions of the marketplace while also obfuscating the fact that shipment is fulfilled by a third party vendor.
As the data suggest: to a majority of shoppers, fulfillment logistics are not as important as final delivery.
If the product is sold at the advertised price and delivered in a timely manner, a majority of shoppers aren’t concerned about the original seller or how the product travels from its point of origin to their front door.
4. Which of these is most likely to influence your purchasing decision between similar products?
Key Statistics:
- 34% of respondents are most influenced by onsite customer reviews when purchasing similar products.
- Just 5% of consumers are influenced by sales staff recommendations.
- Online customer reviews have the greatest impact on consumer purchasing decisions.
- While 34% of consumers are influenced by onsite customer reviews, only 22% are influenced by customer reviews found on 3rd party websites.
- Companies are better served by prioritizing onsite reviews over 3rd party site reviews.
It’s hard to understate the importance of online reviews and their value to small businesses. Our data shows that business owners should focus on capturing onsite reviews rather than 3rd party reviews.
Focusing on onsite customer reviews using TrustPilot or Shopify would be more valuable than gathering reviews on Yelp, Google, or through the Better Business Bureau.
Onsite reviews are much more likely to influence consumers than outside sources, like expert recommendations or 3rd party review sites.
Our information also suggests that a business shouldn’t rely on its sales staff to be the final purchasing authority for any shopper and should instead prioritize customer testimonial feedback as an upward driver at key price points.
5. Do you typically trust online reviews?
Key Statistics:
- 7 in 10 consumers trust online reviews.
- 31% of consumers are skeptical of online reviews.
The importance of online reviews continues to grow as a buying signal for consumers in the digital space. Whether positive or negative, it’s safe to say that any review left online is considered persuasive and influential to a majority of potential shoppers.
According to our results, companies will be financially rewarded by investing in gathering online reviews for their businesses.
Business owners should have a solution in place to actively address low ratings and bad experiences in a timely and effective fashion.
Age Demographic Highlights
Age group 25-44: 76.7% of this age group trusts online reviews
Age group 45 and up: 63.3% of this age group trusts online reviews
Key Statistics:
- 76% of consumers under the age of 44 trust online reviews, compared to only 63% over 45.
- Consumers over 45 years old are more skeptical of online reviews than their younger counterparts.
- From a demographic standpoint, the willingness to trust online reviews seems to decrease with age.
- Younger consumers are more inclined to believe the authenticity of online reviews and consumer feedback.
When considering the demographic data surrounding online reviews, it’s easy to spot a 10% gap between the 45+ crowd and younger generations.
Trust in online reviews appears to follow a generational pattern, where younger consumers are more likely to trust online reviews. This could be due to greater familiarity with digital technology, which may evoke greater trust in the authenticity of the review.
Gender Demographic Highlights
Male: 73.8% of men trust online reviews
Female: 64.2% of women trust online reviews
Key Statistics
- 74% of women trust online reviews, compared to 64% of men.
- Males are more skeptical of online reviews than females.
- Across every age group and demographic, men are more inclined to distrust online reviews.
An analysis by gender provides additional insights into how men and women view online reviews.
While men are more skeptical than women when considering reviews, the majority of both genders consider reviews trustworthy.
Website purchasing experiences can vary wildly, and many convenient forms of payment have some measure of security baked in. However, if push comes to shove, consumers trend toward ease of use. E-commerce operators should do their best to ensure that their checkout experience is fast and easy while offering a wide variety of preferred payment methods during the transaction process.
Survey Methodology:
We surveyed 2387 people via an online publishing network in the United States. All gender and all ages represented.
Raw 2019 Buyer Behavior Study Data buyer behavior survey
Understanding how customers engage with the buying process is an essential component for any business. As online shopping shifts from desktop platforms to mobile devices, consumer interactions with their favorite brands are ripe for change.
Understanding the online browsing habits of consumers as they research and purchase products — as well as what devices they use to take those actions — can provide key insights into the digital infrastructure a business needs to properly support customer demand.
For our 2019 study, we asked nearly 2,400 U.S. respondents about their online research and purchasing habits to better understand the modern approach to online shopping.
Summary of the Buyer Behavior Survey
Key Statistics from online research preferences questions
- 4 out of 10 people use a smartphone when conducting research online.
- Only 2.3% of those surveyed said they would use a smart speaker to help with online research.
- Smartphones are the most commonly used device for conducting online research.
- Individuals use more than one device when conducting research online.
- Laptops are the most preferred research tool for consumers over 55.
- Tablets are utilized nearly twice as often among consumers over 55 (23%) when compared to those 54 and under (12%).
- Only 18% of respondents 18-44 said they use desktop computers to conduct online research.
- 82% of consumers said they used Amazon or Google when researching a product.
- Only 8.2% of consumers use social media when researching a product online.
Key Statistics from online purchasing questions
- 71% of consumers prefer to use credit or debit cards when making online purchases.
- Only 2.5% of consumers prefer to use ACH as a form of online payment.
- Consumers prefer to utilize Paypal or Stripe (21%) nearly five times more than Apple Pay (4%) or Amazon Pay (4%)
- 40% of consumers aged 18-24 prefer to use debit cards, compared with just 18% of consumers 65 and older.
- Generation Z prefers debit cards over credit cards as their most preferred method of payment online.
- Smartphones are the device most often used when making online purchases.
- 75% of online purchases are made with portable devices, like smartphones, tablets, and laptops.
- For consumers 65+, laptops are the preferred device for online transactions.
- 4 in 10 respondents say security is their biggest reason for using a particular payment method to purchase products online.
Buyer Behavior Survey Questions:
Jump to the answer of a specific question by clicking a question below:
Online Research and Device Preferences
1. What device do you use to conduct online research?
2. Where do you search when researching a product?
Online Purchasing Preferences
3. When purchasing a product online, what payment method do you most prefer?
4. When making online purchases, what device do you most often use?
5. When purchasing a product online, what is the biggest reason for using a particular payment method?
1. What device do you use to conduct online research?
Key Statistics:
- 4 out of 10 people use a smartphone when conducting research online.
- Only 2.3% of those surveyed said they would use a smart speaker to help with online research.
- Smartphones are the most commonly used device for conducting online research.
- Individuals use more than one device when conducting research online.
- Smartphones, laptops, and tablets comprise 89.6% of online research.
- Stationary desktop devices comprise 22% of consumer online research.
This question was set up in a multiple answer format, meaning that respondents could select more than one answer for their response. Because of this, the total number of responses was 31.5% above the number of total participants. Bearing that in mind, the numbers skew heavily toward mobility as a key factor when choosing a device to conduct online research. Mobility often comes at the sacrifice of screen size, which is something any business operating in the digital space should consider.
Given that search engines like Google have started to prioritize how websites look on mobile devices over desktop versions, it’s safe to say that businesses operating in the digital space should invest in responsive design and web elements that look good on a wide assortment of screens.
Age demographic results for 18 – 44-year-olds
- Almost 50% of those aged 18 -44 conduct online research using a smartphone.
Age demographic results for 55 + years
- Over 60% of those over 55 conduct online research with a laptop or desktop.
Age-related key statistics:
- 48% of consumers aged 18-44 use smartphones when conducting online research.
- Laptops are the most preferred research tool for consumers over 55.
- Tablets are utilized nearly twice as often among consumers over 55 (23%) when compared to those 54 and under (12%).
- Only 18% of respondents 18-44 said they use desktop computers to conduct online research.
- Adults aged 18-44 are more likely to integrate smartphones into their research process.
- 26% of those aged 55+ said they use a smartphone for research and nearly 23% use a tablet
Digging further into the demographic data shows the influence of smartphones and tablets across the generational divide.
With only 18% of those aged 18-44 using desktop computers and even fewer(12%) using tablets, the bias toward pocket-sized, digital accessibility highlights a key shift in shopping habits for young and middle-aged adults.
Looking at an older cohort, laptops and desktop computers are still the devices of choice when conducting research online.
2. Where do you search online when researching a product?
Key statistics:
- Nearly 60% of consumers use Google when researching a product online.
- 22% of respondents said they search Amazon when conducting product-based research.
- 82% of consumers said they used Amazon or Google when researching a product.
- Only 8.2% of consumers use social media when researching a product online.
- Consumers utilize more than one platform when conducting online research.
This multiple answer question saw 44% more answers than respondents. The high number of responses around search engines — specifically Google — indicate their position as a major component in online research trends.
For most users, search engines are a likely starting point before continuing on to Amazon, YouTube, or various review sites and online community forums.
However, Google and Amazon collectively captured 82% of consumer responses. It’s a safe bet to say that search engine optimization on both platforms is massively important to product discovery and online sales.
While it may serve to increase brand awareness, consumers don’t seem to rely on social media when conducting product research.
3. When purchasing a product online, what payment method do you most prefer?
Key Statistics:
- Nearly 1 in 2 shoppers (45%) prefer to use credit cards when purchasing a product online.
- 71% of consumers prefer to use credit or debit cards when making online purchases.
- Only 2.5% of consumers prefer to use ACH as a form of online payment.
- Consumers prefer to utilize Paypal or Stripe (21%) nearly five times more than Apple Pay (4%) or Amazon Pay (4%)
- 21% of consumers utilize Paypal or Stripe when making an online purchase, while 8% prefer Apple Pay and Amazon Pay.
Consumers still prefer to purchase with credit cards, which are more popular than nearly all other payment methods combined.
Going beyond credit cards, the popularity of card-based transactions continues to dominate the market. When combined with debit cards, card-based transactions capture 71% of the market.
While alternative online payment methods like PayPal and Stripe are preferred by nearly 21% of consumers, these payment methods are more likely to be unavailable. The same is true for Amazon Pay, Apple Pay, and other digital wallets.
For online merchants, accepting transactions from traditional merchant vendors like Visa and MasterCard to newer forms of digital payment is necessary to cover the market.
Results from 18-24 year olds
- 38.9% of this age group prefers to shop online with a debit card.
Results for age group 65+
- 59.4% of this age group prefers to shop online with a credit card.
Key Statistics:
- 40% of consumers aged 18-24 prefer to use debit cards, compared with just 18% of consumers 65 and older.
- While only 42% of consumers aged 25-34 prefer credit, that number climbs significantly in the 65+ crowd to nearly 60%.
- Generation Z prefers debit cards over credit cards as their most preferred method of payment online.
- Those aged 65+ overwhelmingly prefer credit cards as their preferred method of payment online.
While many preferences were similar across all age groups, older consumers clearly favor credit cards over alternative payment methods. On the other hand, respondents aged 18-24 prefer debit cards to credit cards.
Considering that credit must be established and then built upon, the 18-24 cohort may find themselves limited in credit use and availability, deferring to a debit card until they’re better established in the market.
Younger demographics may also be more inclined to use newer alternative forms of payment options available in today’s market — options that may not have been around when older consumers were making choices around how to spend their money.
4. When making online purchases, what device do you most often use?
Key Statistics:
- Smartphones are the device most often used when making online purchases.
- 75% of online purchases are made with portable devices, like smartphones, tablets, and laptops.
- 32% of consumers prefer to purchase on laptops, compared to 22% on desktops.
- 11% of respondents make online purchases with tablets.
It’s impossible to discount the rise of mobile devices and their impact on consumer purchasing habits. In the US and across the globe, mobile devices are often used to access the Internet more than desktop computers.
Our data shows similar results for online purchases. When buying online, consumers are most likely to do so on a device they can carry on their person.
Whether this comes down to impulse purchasing or casual browsing habits while away from an office setup, 3 out of 4 online purchases are generated from portable devices.
Unlike desktops, this range of mobile devices fluctuates wildly in size and on-screen real estate. This may present new challenges to business owners in the e-commerce field who have yet to implement responsive design as an answer to mobile browsing habits.
However, this is a key factor for businesses to consider. With so many screen shapes and sizes, adaptable interfaces are a key component in online transactions.
Results for those over 65
- For consumers 65+, laptops are the preferred device for online transactions.
While the raw data highlights smartphones as a majority device, a demographic analysis reveals that it’s a generationally-weighted tool, with consumers aged 25-34 far more preferential to smartphones than their elders.
The preference for smartphones decreases with age, with each cohort showing a preference for larger screens as they get older — perhaps due to biological changes and failing eyesight.
Notably, tablets aren’t a primary purchasing device even among older cohorts. Instead, laptops and smartphones vie for the top spot across every generational divide.
5. When purchasing a product online, what is the biggest reason for using a particular payment method?
Key Statistics
- 47% of consumers cite convenience as their primary reason for using a particular online purchasing method.
- 4 in 10 respondents say security is their biggest reason for using a particular payment method to purchase products online.
- 13% of buyers view rewards as a primary reason for using a particular payment method.
Consumers prefer fast and easy checkouts to additional security measures or incentivized rewards when making purchases online. It’s reasonable to conclude that while something may be a primary reason doesn’t mean that consumers wholly disregard the other options.
The same may be said for online purchasing habits. In a recent Experian survey, consumers point out that security, while important, shouldn’t slow down a website or impair the user experience.
Website purchasing experiences can vary wildly, and many convenient forms of payment have some measure of security baked in. However, if push comes to shove, consumers trend toward ease of use. E-commerce operators should do their best to ensure that their checkout experience is fast and easy while offering a wide variety of preferred payment methods during the transaction process.
Methodology:
We surveyed 2387 people via an online publishing network in the United States. All gender and all ages represented.
Thank you for reviewing our Buyer Behavior Survey!
True Blue Life Insurance 2019 Industry Trends Survey
Key Statistics:
- 77% of respondents said they were uncomfortable having their premiums fluctuate based on their yearly physical results.
- 59% of overall respondents overall said they would not be willing to wear a fitness tracker and share their data with insurance companies for better rates.
- When offered the choice, only 7% of overall respondents said they would be comfortable providing their DNA testing information in exchange for better rates or premiums.
- Depending on age demographics, respondents were most comfortable providing either their financial history or fitness data when forced to choose, if it meant receiving better rates or premiums.
- 62% of respondents were uncomfortable with the idea of using AI in their insurance buying experience.
- 78% of respondents said they would feel most confident buying life insurance from a local agent versus a big box retailer or online agency.
- For Gen Z respondents, outside of a local agent, Costco, Walmart, and Amazon were more popular choices than online agencies, the overall second choice.
Looking forward at the trends hitting the insurance world in 2019, they are setting the stage for some massive game-changers that stand to change the industry as we all know it.
At large, this survey found that consumers were generally uncomfortable sharing sensitive information with insurance companies and dealing with AI-driven, automated underwriting processes. While consumers may not currently be receptive to these innovations, it is clear that the game-changers they power are here to stay.
Beyond these general findings, read our more detailed breakdowns for each question below and how each sets up these 2019 game-changers:
Would you be willing to have your life insurance premiums fluctuate based on the results of your yearly physical?
- 77% of respondents said they were uncomfortable having their premiums fluctuate based on their yearly physical results.
The results here point to a general discomfort that respondents felt about the idea of having their rate fluctuate along with their health data. Unlike with traditional life insurance policies where an agent quotes the insured for a standard rate, this kind of variable premium policy means that unhealthy lifestyles, as tracked through yearly physical data, would result in higher premiums.
On one hand, companies like John Hancock and Health IQ believe that variable premium policies are a game-changer that will help encourage healthier insureds over the long term. In reality, it stands to drive unhealthy people away from even considering a life insurance policy for fear of astronomical premiums or denial of coverage. It makes it clear that these policies only benefit those who are already healthy
This line of thinking also pulls back the curtain on how a significant portion of the US population is either underinsured or doesn’t think they’re insurable because of their health. While variable premium policies were created with the best intention, they are also widening the gap for people who really need the coverage, but can’t find it.
Would you be willing to wear a fitness tracker and submit reports to insurance companies if it means potentially receiving a better premium?
- 59% of overall respondents overall said they would not be willing to wear a fitness tracker and share their data with insurance companies for better rates.
- 54% of respondents aged 18-24 were unwilling to wear a fitness tracker and report data to insurance companies in exchange for receiving a potentially better premium.
Similar to their response toward fluctuating premiums, respondents weren’t exactly receptive to the idea of submitting their fitness data to dictate their insurance premiums. It’s another system that seems to favor the healthy and drive the wedge in further for unhealthy people.
But, the margin here is much smaller, and previous answers in this survey show that respondents may be more receptive to sharing this kind of information when offered a choice. John Hancock has seen success with their Vitality Program over the past few years, though it is still yet to be seen what effect making these interactive policies standard issue will have on their company. Coupled with the least negative response from Gen Z respondents, the use of fitness data may have some staying power in the future of insurance underwriting.
If you had to choose one, what background information source would you be most comfortable sharing with insurance companies to use when setting your rates/premiums?
- When offered the choice, only 7% of overall respondents said they would be comfortable providing their DNA testing information in exchange for better rates or premiums.
- Depending on age demographics, respondents were most comfortable providing either their financial history or fitness data when forced to choose, if it meant receiving better rates or premiums.
The even split between the data (financial, fitness, and medical data) consumers are willing to provide insurance companies to set their premiums shows, despite general apprehension, they’ll eventually give their information.
With future buying experiences based on automated underwriting, this is the information that is driving the processes many insurers are already using. While consumers may seem apprehensive about the ideas of AI or giving out sensitive information, they’ll wind up submitting at least one of these types of data. This is especially if it doesn’t appear to be too invasive and makes their experience more convenient.
As an abstract concept, consumers may not like giving up their information, but utilizing it is key to powering the agentless innovations across the industry and it shows no signs of slowing down. In the end, it will just take a little time for consumers to warm up to this kind of innovation as the new normal.
How comfortable would you feel buying an insurance policy with the help of an AI program versus a human agent?
- 62% of respondents were uncomfortable with the idea of using AI in their insurance buying experience.
Based on the results from this question, it is clear that the idea of using AI is still really unsettling to a lot of consumers. Taken in tandem with consumer’s preference for using a local agent, AI-powered automation may make insurance buying experiences seem more impersonal.
On the flipside of this AI apprehension, the implementation of agentless solutions opens up the insurance industry for more growth and change. It allows companies like Transamerica and MetLife to have incubators and investment arms, which allows them to innovate in preparation for incoming “market killer” competitors. This even allows insurers, like Principal and Assurity, to raise their coverage maximums as high as $1 million without medical exams. Just like in any other industry, it may take time for consumers to get used to the idea of using AI for insurance buying.
Where would you feel most confident buying a life insurance policy?
- 78% of respondents said they would feel most confident buying life insurance from a local agent versus a big box retailer or online agency.
- For Gen Z respondents, outside of a local agent, Costco, Walmart, and Amazon were more popular choices than online agencies, the overall second choice.
The popularity of local agents in this question illustrates consumer apprehension toward agentless solutions. Despite this, many insurers are still pursuing agentless solutions, cutting out many of the human elements of their processes in favor of convenience and cost-cutting.
Though they rank relatively low in our survey results, Costco, Amazon, and Walmart are all entering the insurance industry in one way or another in 2019. They stand to drastically change the way everyone in the insurance industry does business, which is why some consider them “market killers.”
To add even more credence to the potential of these “market killers,” for Gen Z respondents (aged 18-24), Costco, Walmart, and Amazon were all more popular options than an online agency, which was the overall second choice. As they were the only demographic who responded like this and will soon start buying insurance, this is clear evidence for why these established retailers and brands stand to be key forces in the insurance world moving forward.
True Blue surveyed 1047 people in the United States ages 18 – 55.
It was Daniel DeFoe, best known for his novel, Robinson Crusoe, who wrote in another work, The Political History of the Devil, published in 1726: “Things as certain as death and taxes, can be more firmly believed.” Sixty-three years later, Benjamin Franklin wrote in a similar vein, in a letter to a friend in France, “In this world, nothing can be said to be certain, except death and taxes.”
What, you may wonder, does this have to do with the benefits of life insurance? Everything, really, as a well-customized term life insurance policy is one of the few truly effective things that will take care of any financial issues associated with your death and the considerable taxes that may also be due. You can’t avoid death and taxes, but you can mitigate their effects. You need life insurance, and you’ll also love all the many benefits it can bring you and your family.
Life Insurance Benefit #1
Funeral costs have risen over the years to become a quite considerable, but necessary, expense. Without insurance coverage in place, the entire funeral costs fall to the family to find. At the time of writing, the average traditional funeral can cost between $8,000 and $10,000, a very significant amount, especially if money is tight. When you add to that the possibility that the person who has died was the main breadwinner, the lack of a life insurance policy can bite hard.
With proper life insurance coverage in place, your family will have peace of mind and no financial worries to think about. They will, of course, have their grief at your loss to concern them, but no insurance policy can cover that adequately. They will, however, be able to grieve naturally, without having to worry about the cost of the funeral, and if you were the main breadwinner for the family, they can be properly looked after financially too when you are gone, all thanks to your life insurance policy.
Life Insurance Benefit #2
If your house is mortgaged and you are the main breadwinner, your family would most likely find it very hard to make the monthly mortgage payments if you die. This could result in them losing the family home if things got worse and the bank foreclosed. A well-structured life insurance policy could take care of that issue for your family, giving everyone peace of mind and greater security.
Upon the death of the insured person, if that is you, the insurance company will cover all the necessary financial debts. There will be no surprise bills for your family, no wondering how they will find the money with all the worry that can cause. A death in the family is a stressful enough time, and while there are many things the family will have to pay, estate taxes, funeral costs, etc, your life insurance policy will take care of it all with the minimum of fuss.
Life Insurance Benefit #3
Your term life insurance policy doesn’t have to be just for covering things after you die. With living benefits, it can also cover expenses should you have a serious illness – even a terminal illness – or an accident that prevents you from working. Medical expenses piled on top of the loss of earning can amount to a considerable sum, so it’s peace of mind once again to know this can be adequately covered by what can effectively be a kind of health insurance policy.
Life insurance policies can be structured to provide a kind of education plan for your children. It can kick in when your child reaches 18 and enrolls in college. All the many expenses associated with higher education can be met, and should you die unexpectedly while your child is still young, the money already paid into the policy can still be paid out by the life insurance company to be used to help offset education costs.
The Secret Behind The Benefits Of Life Insurance
Compound interest is the secret to how life insurance works. You pay the insurance company a monthly premium, which they then invest over a period of time. In general, the longer the period of time involved and the more the amount of money that can be accumulated, the cheaper the insurance policy will be for you. The idea is that when you as the insured person dies, the insurance company pays back to your beneficiaries a portion of the money they have accumulated from you while keeping back some of it for themselves.
The cost of your life insurance policy depends on several things. In general, the easier it is for the insurance company to perform this service for you, the cheaper it will be for you. The interest rate and the time involved are the two main things that determine how fast and by how much your money grows. The longer you have to pay into your life insurance policy, the better it will be. Starting early allows compound interest to do its magic much more effectively.
Compound interest takes time to become really effective. It is in the final years of your policy’s maturing that the greatest effects are seen. This is when a large amount of annual interest is added to the principal sum (which after 20 or 30 years of regular payments has become a significant amount) to generate even more interest, and the snowball effect comes into play in a very noticeable and impressive way. Albert Einstein understood all the mysterious factors at play when he said, “Compound interest is the eighth wonder of the world. He who understands it earns it … he who doesn’t … pays it.”
The life insurance industry has been one of the last holdouts in embracing new technologies. The good news is that the old guards are changing their antiquated ways to streamline the buying process and cut costs.
With the use of new technology, we will continue to see insurance companies attempt to bypass the old face-to-face agent sales and sell direct-to-consumer online. There is big money on the table when companies avoid paying agent commissions.
AI (artificial intelligence) programs are now used to pull public records such as credit reports on the fly in order to issue policies quicker and without the need for medical exams. This means that your credit history can now adversely affect your life insurance rates.
My favorite new trend is the inclusion of free accelerated benefit riders. More companies are offering these living benefit riders that allow applicants to withdraw funds from their policy while they are living. These are lower cost alternatives to long-term care and disability policies and are an influential selling point for term life insurance policies.
Insurance companies providing online direct-to-consumer applications
There is big money in cutting out the middleman in the insurance process, aka, the agents. Companies are creating advanced AI calculations to approve applications immediately. New entrants selling direct to consumer products are Mass Mutual and Sagicor Life. Mass Mutual created a new product that is sold through the havenlife.com website. With its new approach, Haven Life has found a way to potentially mobilize the highly coveted millennial demographic, which it counts as a growing customer base.1
Sagicor life has been a leader in providing quick issue no medical life insurance and has now ventured into selling direct as well through their website sagicornow.com. “Today, consumers rely on digital platforms more than ever and life insurance needs to keep pace with our lifestyles,” said Bart Catmull, president & chief operating officer, Sagicor.2
I expect to see more companies attempting the online direct-to-consumer model this year. The problem is that insurance companies have to carry cash reserves, and immediate issue policies are considered high risk of loss to the insurance companies.
Credit reports affecting how much you pay for life insurance
Insurance companies are pulling credit history in real time from companies like LexisNexis. LexisNexis Risk Classifier utilizes data from attributes derived from public records, driving history and credit to help better assess a proposed insured’s risk profile.3 What this means is credit history such as a bankruptcy, foreclosure, short sale, tax liens, or even a low credit score can affect your life insurance rates.
Recently, The Savings Bank Life Insurance Company (SBLI), which provides life insurance products to individuals and families throughout the U.S., was looking to satisfy the needs of today’s life insurance applicants by providing faster turnaround times, while reducing underwriting costs. To achieve these goals, they turned to advanced analytics and predictive modeling solution, LexisNexis® Risk Classifier, to accelerate life underwriting and remove the need for invasive tests.4
This is a fairly new data source for insurance companies and not every company uses this data, so an independent agent can direct consumers to companies that do not look at this data.
Life insurance policies are replacing disability and long term care policies
Sales of long term care and disability policies are down among insurance providers. What is taking its place is called “accelerated benefit riders” that are either included or added on to life insurance policies. The accelerated benefits options in a life insurance policy provide that all — or a portion of — the policy proceeds will be paid to the insured upon the occurrence of specified events. These include such things as the diagnosis of a terminal illness, the need for long-term care or the onset of a medically incapacitating condition. The life insurance company will deduct the accelerated benefits payment from the death benefit it ultimately pays to the beneficiary.
Currently, more than 150 companies offer some type of accelerated benefits. In addition, other companies have indicated that they are developing such plans or are considering them. More than 3 million Americans are now protected by accelerated benefits.5
The riders are apparently cheap for insurance companies to include on life policies because they have a low probability of being used and the payouts are limited to the amount of coverage in the policy. I believe we will see more companies are offering these added benefits as a free rider on term life policies. It is a strong selling point that counters one of the main objections in buying life insurance. You no longer have to die in order for your policy to pay out.
The main theme for the life insurance industry this year is the use of technology to streamline the buying process. We are seeing more companies selling direct-to-consumer which unfortunately eliminates the need for agents. Companies are using data feeds to access customer data such as credit history in order to determine insurability. We are seeing long term care and disability benefits added free of charge on life insurance policies in the form of accelerated death benefits. The good news is that life insurance is becoming easier to get. The bad news is that life insurance agents are seeing declining job stability.
Throughout the years, a woman’s role in the family and in the business world has changed quite a bit. And with this change has come her need for life insurance. Whether she’s the primary breadwinner of her family as an executive in the corporate world, a single parent working a 9-to-5, a stay-at-home mom, or something in between, women need life insurance more than ever before.
Many women today are making more money than their spouse or they are working as a single parent and the head of a household. Even a stay-at-home mom has a dollar value attached to her work in the home. This creates a financial responsibility to her family and a need for protection from the loss of her salary should the worst happen.
No matter what her career choice or marital status, however, life insurance for women is important. And because women’s life insurance rates are typically cheaper than men’s, it’s relatively easy to fit a policy into any budget.
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Women in the Workforce
According to the United States Department of Labor, 57 percent of women participate in the labor force. And the Bureau of Labor Statistics reports that women make up about 47 percent of that workforce. Despite these facts, women are consistently under-covered when it comes to life insurance. According to the Insurance Information Institute, 43 percent of adult women have no life insurance. And among those who are insured, they only carry about a quarter of the coverage necessary for their needs.
On average, women have $129,800 of individual life insurance, compared to $187,100 for men. Additionally, women with high personal incomes of $100,000 or more are less likely to have life insurance than men at the same income level.
Life Insurance Replaces Your Income
If your income helps to support you, your children, and/or your partner, a life insurance policy will provide financial support to them in the case of your death. This can help with the everyday expenses, of course, but it can also assist with helping to cover the cost of the funeral and anything related to it. Sure, it’s unpleasant to think about and plan for your own death, but it is a responsible way to make sure your family doesn’t have to worry about such things on top of having to deal with your loss.
Life Insurance Covers the Stay-at-Home Mom
If you’re a stay-at-home mom, don’t be fooled into thinking you don’t need life insurance. There’s a dollar value attached to what you do at home — a high dollar value for valuable and diverse work that’s just as important to your family’s welfare as working outside of the home.
While we don’t like thinking about a worst-case scenario, if something did happen to you, having a life insurance policy would provide financial support to your family during a very difficult time.
Single Ladies Need Life Insurance, Too
If you’re single and you don’t have any children, ask yourself a couple of questions concerning your life insurance needs:
- Do you take care of an aging parent or a sibling?
- Do you have a lot of debt? More importantly, do you have a co-signer on that debt?
Typically, the executor of your estate will sell off whatever they can to help pay off your debts when you die. If you have co-signer on a loan, however, they will be responsible for repaying it. Of course, if neither of these scenarios applies to you, you’re probably OK to put off purchasing a life insurance policy. But keep in mind, it’s cheaper to buy one when you’re younger.
How Much Life Insurance Do You Need?
As a general rule of thumb, and depending on your age, you should multiply your income by anywhere from three to 15 times to arrive at the amount of life insurance you should consider buying. So, if you’re a 40-year-old woman making $50,000 per year at your job, you will want to look at buying a policy that’s worth about $750,000.
And as a stay-at-home mom, don’t sell yourself short when deciding on an amount for life insurance. Just because your family doesn’t depend on your income, it doesn’t mean you don’t need any life insurance. In a recent survey from Salary.com, stay-at-home moms could be charging around $120,000 per year for their work. This value was taken from the duties they perform in the household on a regular basis. Have you ever thought of yourself as the CEO of your home? You should. What about housekeeper, cook, janitor, psychologist, chauffeur and day-care teacher, just to name a few? Believe it.
According to Loretta Worters, vice president with the Insurance Information Institute, if a stay-at-home spouse dies, the family would need someone to handle the household duties. That’s no small task. The cost could be substantial and a life insurance policy would help to cover those expenses.
Women Pay Less for Life Insurance
How are life insurance rates determined? They are priced according to the average life expectancy for your gender and age. So if you smoke, participate in any dangerous activities on a regular basis, or have certain health issues, it will affect what you pay.
There is also a difference between what men and women pay, primarily because men have a shorter life expectancy than women. In fact, women outlive men by about five years. Women tend to develop cardiovascular problems like heart attack or stroke later in life than men do. This longer life expectancy will help to lower your life insurance premiums.
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Finding the Right Insurance Policy for You
When it comes to the different types of life insurance you can choose from, it’s the same as men. You can select a term life policy at a cheaper premium for a specific amount of time, or you can select a permanent plan that will last the rest of your life and provide you with additional financial planning options. Maybe a no medical exam policy is the way to go for you. The type of insurance you choose and the amount you purchase depends on what your goals, needs, budget and family situation are.
For instance, if you are still young and single, your life insurance needs will be much different than if you are a bit older, married and/or raising a family.
No matter what your current life situation, a licensed True Blue Life Insurance agent is ready to speak with you about your life insurance needs. True Blue compares the policies and rates of hundreds of different insurance companies to find your best solution. Speak with a licensed agent today at 1-866-816-2100.
Buying life insurance traditionally involves setting up a home appointment with an agent, disclosing detailed medical information, getting cleared by a doctor, and waiting for a mountain of paperwork to be approved.
That system didn’t work for Maria Alvarado of Turlock, CA. She wanted life insurance for her family, but working seven days a week cleaning houses, she didn’t have time to set up an appointment or participate in a lengthy meeting.
So she went online to www.TrueBlueLifeInsurance.com, found a policy she liked, entered only her most basic contact details, and pressed a button. That was it. The next day she had her insurance, with no appointments or medical exam necessary.
But did the online policy meet her needs?
“Yes, I’m really happy with it,” Alvarado said. After a few months, she upgraded her policy to get additional coverage—again, with the click of a button.
David Cook of Oxnard, CA, also chose True Blue to save time. A retired Navy man, he has insurance through the military and could have chosen to visit his doctor to obtain traditional life insurance, but decided not to.
“It takes time. You have to go on base and wait,” he said. “Convenience was the number one thing for me—get it done as quickly as possible.”
As purchasing services on the internet gains wider acceptance, more people are choosing to buy life insurance online, particularly if they can avoid a medical exam.
“There’s definitely a large demand for it,” said Jason Cozzetti, a wholesale representative for National Brokerage, LLC, which sells the no-medical-exam policies. “People don’t want anyone in their house taking up their time. They don’t want to slow down to do blood and urine tests with a nurse.”
No-medical-exam life insurance is riskier for insurers, and not many life insurance companies currently offer such policies, but that’s likely to change due to customer demand, said Brian Greenberg, CEO of True Blue. About 60% of his business consists of no-medical-exam policies, and the proportion continues to grow.
No-medical-exam insurance can cost more than the kind that requires an exam. Still, customers prefer it. “Given a choice, they’ll pay more for it,” said Greenberg, whose business this year won him entrance to the Million Dollar Round Table, an association of the top 1% of insurance professionals.
Insurance companies are heavily regulated and run on antiquated systems that are hard to change, Greenberg said.
“As more medical data becomes available online, it will be easier to do. Without a doubt, the medical insurance business is going to move to this model.”
Moral: Don’t bother your customers—and they’ll reward you with their business!
We have some great news: our own founder and CEO Brian Greenberg just won an important honor. He was invited to join the Million Dollar Roundtable, the premier association for professionals in the financial and insurance field. Only the top 1 percent of agents nationwide qualify for membership, so it’s a big deal.
We want to extend our warmest thanks to you for making it possible!
You may not know it, but True Blue began in an unusual way. Brian started his career working as a traditional agent for a large company, setting up appointments and making in-person visits to potential customers in their homes. But he never felt comfortable making sales pitches.
“My theory is life insurance should never be sold. It should be bought,” he says.
While personal contact is considered a vital tool in many businesses, in the life insurance business, Brian was noticing something else.
Some people felt uncomfortable discussing their medical history and having their blood pressure taken by an insurance agent—requirements for getting the insurance. Others were squeamish about discussing their financial history and goals, especially if they had lost money. Obtaining insurance also required a lot of paperwork and time.
Being a computer-oriented guy in his 30s, Brian did what came naturally and in 2007, created his own online life insurance business.
He doesn’t have to try to convince people to buy life insurance anymore—if they’re shopping for it, they can use this site. People don’t have to discuss their prostate cancer or their failed investments face-to-face, or even over the phone.
Other companies sell insurance on the internet, but every one of them follows the same pattern: they collect a little information, then they require a phone call, often attempting to upsell the customer.
Brian doesn’t do that.
He collects all the information he needs online and sends you an application right away. If you have a question, you can always call him.
You may also have noticed that some online insurance companies require you to sign a disclosure warning you that you might be contacted by several other types of insurance companies.
Sure you will. These companies make money by selling your contact information. But Brian doesn’t give or sell your information to anyone.
Licensed in all 50 states, he lets YOU choose the company and the rate that suits you best.
Thriving in a field where fewer than 20% of new agents are still in business after 4 years, Brian has found his niche with a business model that feels comfortable for both him and his customers: Don’t sell. Provide information, respect customers’ choices, and be efficient.
We think Brian’s don’t-bother-the-customer rule is the only way to go, and apparently lots of you agree.
Thanks again for making True Blue a success. We hope there are lessons in his story that you can apply to your own business someday.
Every year in the US there are nearly 2 million new diagnosed cases of diabetes. Receiving the diagnosis means joining the ranks of nearly 26 million other Americans who suffer from this condition. There’s no doubt that diabetes, and more specifically Type II diabetes, is a growing epidemic in our nation- and an expensive one at that. An estimated $132 billion is spent annually on medical costs and lost productivity. With 8.3% of the population suffering from this condition, many are faced with learning how to control their diabetes, as well as how to handle added costs and new challenges. When it came to purchasing a life insurance policy, for instance, the diabetic has been destined to pay higher rates, if they can get insured at all. Many diabetics have just accepted this reality as another side effect of their disease. Now ING is changing the game when it comes to life insurance for type II diabetics.
ING has just announced that applicants for insurance who suffer from type II diabetes can still qualify for preferred rates provided that they meet the proper criteria. This is great news for many who maintain a healthy lifestyle and control their diabetes properly. If he or she can qualify as a true Standard applicant, meaning that they require no credits to achieve a standard rate class, and they meet the parameters set for type II diabetics, then they are eligible to receive Preferred consideration.
An example of a type II diabetic who would meet the Preferred rate criteria would be someone who has been diagnosed within the last five years, maintains compliance with their medication and has their blood sugar in excellent control. If the candidate has no other significant medical history and lives an otherwise healthy lifestyle, then he or she will be considered eligible for the Preferred rate. Millions of Americans are receiving word that they suffer from type II diabetes, and many more are estimated to fall into a pre-diabetic category and may soon face a diagnosis. This move by ING helps to insure that they have better options available to protect their loved ones in the future.
If you have been diagnosed with type II diabetes and have been afraid to look into life insurance policies due to higher rates, now is a great time to see if you can qualify for some of the best coverage at the best rates available. It is important to talk with your doctor about the proper ways to manage your diabetes and determine healthy habits. This will increase your chances of being able to take advantage of this opportunity. If you have any further questions about life insurance rates for diabetics, be sure to discuss them with your life insurance representative.
Walmart, through MetLife, is now getting its feet wet in the life insurance industry. The world’s biggest retailer has piloted a scheme in the southeast of the US, in some 200 stores located in Georgia and South Carolina.
The life insurance policies are designed for cost-conscious shoppers. In the age group of 18 to 44, $69 gets you a one-year policy with death benefits of $10,000. If you are in the 60 to 65 age group, it will cost $429 a year, but you will get $25,000 of death benefits.
The process of buying an insurance policy in a Walmart store is quite simple and easy. The interested customer purchases a card for the price of the policy. There are no life insurance quotes to consider, so that alone keeps it simple.
Back home, the customer then calls MetLife, and is asked a number of questions relating to his or her health. If they are approved, MetLife will activate the life insurance policy. If they are not accepted, they will be able to get a refund from Walmart.
Is the customer’s best interests fully considered?
However, is it in the customer’s best interest to buy stock life insurance policies from a huge retailer like Walmart? Certainly, there is the convenience of buying a card at a set price with no life insurance quotes to consider. But that step only allows the customer to actually apply for a policy. They still have to approach MetLife, the people who actually control the policy, and they still have to be approved by them.
Some 33% of American households are not covered by a life insurance policy. Around 50% of those affected say they would like to have life insurance coverage, and these are the people that MetLife and Walmart are trying to persuade.
At least one insurance agency owner has said that in his experience, around 50% of those who apply for a MetLife instant issue life insurance policies are declined. If that is so, then every second person, on average, who buys a life insurance card from Walmart will be simply wasting their time.
Cost cutting, or finding an untapped market segment?
MetLife has been accused of simply cutting the costs tied to middlemen by selling directly to consumers. This would appear to be so, but Shane Winn, a spokesperson for MetLife, has clearly stated that the Walmart/MetLife partnership has nothing to do with cutting costs. He says the life insurance pilot scheme is simply about finding a new and untapped market segment that promises to be profitable for all concerned.
However, the MetLife earnings report for May of this year stated that they want to cut their expenses by $600 million between now and 2016. Cutting out the costs involved by the middleman, the insurance agencies, when selling life insurance, is certainly one way of cutting costs, whether deliberately, accidentally, or incidentally.
Who really has the customer’s best interests at heart?
An insurance agency deals with many different insurance companies. The agency is not owned by any of them and has no real incentive to push one company’s policy harder than another. For this reason, a good insurance agency is about as objective as it is possible to be when selling you an insurance policy, whether it is for life insurance, health insurance, auto insurance, or any other type of insurance.
When an insurance company sells its financial product directly to customers, or indirectly through a partner who obviously has a strong interest in the matter, such as in the MetLife/ Walmart case, their main interest is to sell their particular policy and no other. That may, or may not be, in the customer’s best interests, and in most cases, it is probably not.
MetLife is promoting its new instant issue life insurance policy through Snoopy, the cartoon character from the Charles Schulz “Peanuts” comic strip. The cheerful yellow brand color with its snappy black and white cartoon character is being pushed at the pharmacy and baby sections of Walmart.
Is it too cynical to suggest that those buying pharmacy cures and treatments, who might not be feeling too healthy, may well think that buying a life insurance policy is probably a wise plan? And when starting a new family and buying things for the baby, maybe that’s also a good time to think about securing the future. Perhaps impulse insurance shopping doesn’t work quite as well for those buying a carton of milk.
Note: Picture is courtesy of Wikipedia
When constructing an overall financial plan for you and your family, a few things come to mind: building retirement savings, saving for children’s college education and purchasing insurance coverage for health, car and home. However, an important element to include in your financial plan is life insurance coverage. Listed below are some reasons why life insurance is as important as health and car insurance.
To begin with, the reason why health, home, and car insurance are all important to have is because they provide a financial safety net in the event you (or a family member) gets seriously ill, is in a significant car accident or has a fire or flood in the home. You have peace of mind knowing that you will have money available to get you and your family back to the place they were before the tragic event happened. This is the same reason why you need life insurance – if your family faces the tragic circumstance of your early passing, they will have the funds available to continue life as it was before you died. Life insurance ensures that your family’s grief from your early death will not be compounded by financial obligations they cannot meet because of the loss of income.
Other reasons to keep in mind:
- If you have children, a life insurance payout can ensure that they will have the money to attend college as planned.
- If you care for an aging parent who depends on you for their living situation, a life insurance policy ensures that in the event of your early death, your parent will have the financial means to continue living as they did before your passing.
- Just as in the case of an auto accident when monies are paid out for related items like a rental car or other necessary expenses, a life insurance payout gives your family the money they need to pay for all funeral costs associated with your passing such as the hearse, minister, printed items, etc.
- If you have a large estate and/or have a heavy debt burden, a life insurance policy can make sure your family will have the money available to pay off any estate taxes or debt left behind.
The first step is obtaining your instant life insurance quote. Unlike other online companies, we don’t require your e-mail, name, or any other personal information to see quotes from top life insurance carriers and we never sell your information to other agents or companies. All information is readily available on our site to everyone.
We offer three main types of life insurance policies. For those that want insurance coverage as quickly as possible and don’t want to take a medical exam we have no medical exam life insurance policies that can be issued immediately, or as quickly as 24 hours, depending on the policy you choose. For people with medical conditions, and those over 55 years old, we offer final expense polices that can be issued in as quickly as 24 hours.
For both our non-medical and final expense polices, a brief phone interview with one of our licensed agents is required, and as always these are low pressure and informative calls only.
Lastly we have medically underwritten polices that can be the lowest cost policies available and require a free medical exam performed at your home or office. We provide all the policy information on our website and after filling out our online application form we have all the information needed to send you your application packet by mail and schedule your exam. You never have to speak with an agent if you don’t want to.
For our medically underwritten policies there is nobody quicker at getting policies issued than us. We have cut down our average underwriting time to less than 3 weeks which is unheard of in the life insurance industry. At True Blue Life Insurance all we provide is life insurance. We have worked hard and have tailored our life insurance processes for online users. Throughout the whole process you are kept informed with status update e-mails, our online case management system, and phone calls from our case managers if needed.
We believe as your independent agent we are here to help guide you to choosing the best policy, to answer your questions, and to handle all the paperwork. We take pride in being experts at making the life insurance buying process as easy and quick as possible and we are constantly striving to serve our customers better and on improving our life insurance process. At True Blue Life Insurance we want to be your friend in the insurance business.
