Life Insurance Consumer Preferences

The journey consumers take when purchasing life insurance is unique. It is often said that "insurance is bought, not sold," which means consumers need education and assistance before making a decision. While many financial products require this approach, the complexity and difficulty of selling life insurance are particularly high.

Firstly, consumers generally lack knowledge and confidence in life insurance. Secondly, the application process is often lengthy, complex, and multifaceted, which presents significant challenges. Insurance companies have been working for decades to overcome these obstacles through various methods, such as raising awareness, simplifying and speeding up the application process, and utilizing AI and technology.

In recent decades, behavioral science has become increasingly acknowledged as an effective way to shed light on the mindset of consumers and identify what influences their decisions to proceed or hesitate when it comes to buying insurance policies.

SCOR’s Behavioral Science team, in partnership with the Université Paris Nanterre, began a research initiative in 2021 based on the Discrete Choice Experiment (DCE) method to look deeper into the mechanisms of how and why people make specific decisions when it comes to purchasing life insurance. 

This article, the last report of this study series, focuses on which insurance benefit payment method - income or lump sum - consumers prefer and why.