The Purchasing Habits for Life Insurance Are Changing

The Purchasing Habits for Life Insurance In New Zealand Are Changing

While no studies have been carried out on the purchasing habits of New Zealanders for life insurance the number of websites offering life insurance online would suggest that there is a growing consumer interest in using technology to conduct research and buy life insurance online.

A recent study from the LIFE Foundation in the United States found that today, more than one in four adults prefer to purchase life insurance direct via the Internet, mail or over the phone.

The study found those most willing to consider direct purchase are in the 25-44 year-old age group. This group is of course more computer savvy than the 45-64 year-old age group. 31 percent of those aged 25-44 said they would prefer to buy direct, with three in four citing the Internet as their preferred means of direct buying.

Online website insurer Insurance4Me.co.nz Director Des Morgan believes the trend will be similar for life insurance in New Zealand.

Morgan says he has noticed more consumers wanting to buy their life insurance online instead of from an Insurance Adviser. This sector of the market knows what they want, they don’t wish to talk to sales people and they just want it now for the best price possible.

“Obviously, the Internet has fundamentally changed consumers' buying practices over the last few years," Morgan said.

“With this shift of purchasing preferences more and more life insurance providers are changing their marketing strategies to entice consumers through free online quotes. They are making buying life insurance and mortgage protection insurance real easy with no paper, no signature, and a no hassle process” Morgan said.

Morgan has some words of caution for consumers purchasing life insurance online in New Zealand. He warns the vast majority of life insurance websites are not true online life insurance providers in that they are not passing on the savings made by the consumer completing their own needs analysis and buying direct under a no advice model.

“In many cases the life insurance online quote you receive is the same as if you elected to take professional advice from an Insurance Broker” Morgan said.

Some do entice you to buy direct with 20 to 25% cash back on your premiums for the first year or two only but not for the life of the contract. A good indicator is that if they are sending you a cheque for the rebate then the discount is not reflected in your premiums for the life of the policy.

Morgan said “It does pay to shop around for life insurance in New Zealand and when electing to purchase online make sure the savings made by you buying direct are reflected in the contracted premiums to be paid for the life of the contract”.

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