Turns out that consumers' love affair with the longest-term individual life insurance and annuity products during the pandemic was short lived.

Customers regret buying the products soon after doing so, which negatively influenced their opinion of purchasing other insurance and financial services products, according to new research released by J.D. Power. There also is a general lack of understanding of the products the customers own, the study noted.

“After a brief surge during the height of the pandemic, overall customer satisfaction with individual life insurance and annuity plans have now reverted to their previous long-term trends in which customer satisfaction declines as tenure with the product increases," Robert M. Lajdziak, director of global insurance intelligence at J.D. Power, said in a statement.

The study noted that the products had their largest one-year increase in 2021, but this year overall satisfaction with individual life insurance fell two points to 774 (on a 1,000-point scale). Customers cited interaction with agents/advisors, call centers and websites as areas they were most dissatisfied with. Satisfaction with individual annuities saw a 13-point decrease to 789, led by steep declines in price satisfaction, product offerings and communications.

The study also found that the longer a customer holds on to a life insurance policy, the more they regret owning it. The overall satisfaction score for customers with a tenure of five years or less is 821. That score drops to 785 after six years, 759 after 11 years and 756 after 20 years. “Longer-tenured customers also are significantly less likely to experience their agent or advisor meeting the key performance indicator of making recommendations in the customer’s best interests,” the study noted.

Lajdziak said the data makes clear that insurers struggle to maintain regular contact with customers. “That not only limits potential future sales opportunities, but also exposes incumbents to competitive threat from insurtech startups that are leveraging digital to deliver a more multi-channel approach to client engagement that is resonating with customers,” he said.

The study also concluded annuity providers under-utilize mobile apps in communicating with customers. Three-fourths of their customers receive communication via mail, even though it is the channel with the lowest level of overall satisfaction, the study said. Mobile apps, which drive the highest levels of customer satisfaction, are used just 8% of the time.

In terms of which providers customers are most satisfied with for individual life insurance, State Farm Insurance, with a score of 839, came out on top for the second consecutive year. Globe Life followed with 812 and Mutual of Omaha was third with a score of 801.

American Equity Investment Life Insurance ranked first among individual annuity providers, with a score of 838, followed by Fidelity & Guarantee Life with 829 and Nationwide was third with 822.

J.D. Power surveyed 5,583 individual life insurance customers and 3,152 individual annuity customers from June to August.