Data & Research
Insurance Beneficiaries Desire Financial Guidance
Most surveyed life insurance beneficiaries expressed interest in holistic financial planning, but they did not receive communication from experts.
Reported by Edward Rueda
LIMRA and Empathy Project Ltd., a bereavement care startup, conducted 12 in-depth interviews with life insurance claimants in November, followed by an online survey of 272 life insurance claimants in January, and found that 76% of respondents agreed that tailored financial planning was appealing to them. Tax assistance and estate planning each interested 81% of respondents.
However, the study found that insurance payouts were largely transactional, with 84% of respondents saying dedicated post-claim support would have made the carrier more appealing for developing a continuing relationship. Almost all respondents (91%) had received insurance payouts within the past 18 months, with 70% receiving payouts totaling between $100,000 and $499,000.
Although the study focused on insurers, lessons on building client relationships are also applicable to financial advisers offering retirement planning, wealth and other holistic financial services. Nearly all (96%) beneficiaries surveyed who had received support from insurance carriers reported having financial confidence with managing payout funds, compared with 76% who had not received support.
Furthermore, 96% of the beneficiaries surveyed said they were open to post-claim communication and engagement from the carrier; 87% said they would prefer to continue engaging with the same agent or representative who handled their claim.
“Beneficiaries represent a critical bridge to the next generation of clients,” said Lai-Sahn, Hackett, corporate vice president of LIMRA Applied Research Solutions, in an email with PLANADVISER. “Advisers who connect these payout experiences to longer-term strategies can transform what has been a transactional moment into enduring loyalty.”
Factors Improving Client Interactions
Nearly two-thirds (65%) of beneficiaries said they were “somewhat satisfied,” “neutral” or “dissatisfied” with their claims experience, and if they had had a better experience, 69% reported that they would have explored new products and 62% would have reinvested their payout funds with the carrier.
Even among the 35% who reported being “very satisfied” with their claims experience, 82% said a better experience would have motivated a purchase and 90% would have been more likely to recommend the carrier.
Measuring statistically significant factors that impacted clients’ perception, the study found that communication was the strongest driver, followed by clarity of instructions. Amount of documentation, frequency of contact with clients and how long the payment took did not significantly impact clients’ perception.
Asked what would be very or extremely helpful, 83% of respondents wanted pre-claim interaction with the carrier and 91% said early contact made the claims process easier.
The study revealed a significant gap between the services clients wanted and the percentage that received the services they sought. While 86% of respondents would have wanted assistance with paperwork, only 33% said they received it. Other significant gaps included wellbeing check-ins (76% were interested, but only 43% had them), new product offerings (61% wanted, 37% received) and financial education (65% wanted, 25% received).
Reaching Out
When asked what resources would have encouraged more engagement, respondents most often said tools to manage documents (50%), clear information about resources (50%), access to personalized support (49%) and proactive outreach (48%). Only 11% said nothing would have increased engagement.
As for preferred means of communication, the most-cited responses from beneficiaries were phone calls (56%), in-person consultation (46%), email updates (46%), digital tools and apps (42%) and video calls (30%).
“When a beneficiary calls, it’s not just about delivering a payout, it’s about offering a roadmap. Helping them translate grief into clarity,” said Ron Gura, Empathy co-founder and CEO, in an email with PLANADVISER. “[Explain] what this money needs to do today, how it can support their retirement tomorrow, and how it can honor their loved one’s legacy for the next generation.”
The report concluded that financial planning resources, estate guidance and product discussions were best timed 30 to 60 days after payout, when beneficiaries would be “more receptive and transitioning into the long, practical work of rebuilding.”
Empathy and LIMRA Applied Research Solutions’ respondents were 55% female and 45% male with a median age of 45. Most (59%) had filed a claim for a parent, while 33% had made a claim for a spouse or partner.