Consumer satisfaction with life insurance providers increased over the past year, reversing a downward trend, according to a new survey.
The overall consumer satisfaction score in the J.D. Power 2021 U.S. Individual Life Insurance Study rose to 776, an increase of 13 points from the 2020 vintage of the survey.
"Life insurance ownership has been declining for the past 30 years and overall customer satisfaction with life insurance has historically deteriorated consistently from the moment it is purchased,” said Robert M. Lajdziak, senior consultant of insurance intelligence at J.D. Power, in released comments. “That’s all starting to change. This is a huge opportunity for insurers that get the customer engagement and education formula right. With the spotlight on the industry now shining brighter than ever, insurers that differentiate with simple touch points, close alignment with customer goals and clear communications are well-suited to seize the moment to build significant lifetime value.”
The survey, which gauges consumer sentiment on individual life insurance providers based on a 1,000 point scale, found that State Farm was the highest-ranking life insurance provider based on customer satisfaction with an overall score of 822, followed by Nationwide (813) and Northwest Mutual (807)
While most of the survey’s respondents reported using life insurance policies to cover final expenses and leave money to beneficiaries, significant portions were also buying life insurance to protect retirement income (18%) and for tax planning purposes (9%).
The survey also found that websites have become policyholders’ preferred method of communication with insurers. Two-fifths of the respondents reported using an insurer’s website to research policies, find account information and/or make payments.
This year’s study was based on responses from 4,625 life insurance customers in June and July 2021.