Two recent studies by JD Power, one for individual life insurance and the other for individual annuities, found that overall customer satisfaction with each of these products is improving. This is a big turnaround from recent years where customer satisfaction and engagement declined the longer a person had a policy.
So what changed? Digital interaction. Studies show that more customers are using digital tools to monitor policy updates and changes and to communicate with local agents and financial advisors. Nearly three-quarters, or 72%, of annuity customers regularly interact with their provider digitally via website, email, chat, text message or mobile app.
Other key findings include:
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- The number of life insurance customers buying their policies for financial and end-of-life planning reasons increased to 39% in 2023 from 30% in 2022.
- Customer satisfaction with annuity products was 800 (on a scale of 1,000 points) this year, a significant increase of 11 points from 2022, largely due to increased digital engagement.
- State farm ranked highest among individual life insurance providers for the fourth consecutive year with a score of 843. In the whole country (840) ranks second and MassMutual (809) ranks third.
- F&G (formerly Fidelity & Guaranty Life) ranked highest among individual annuity providers, scoring 843. MassMutual (827) ranked second and Nationwide (826) third.
“Life insurance sales enjoyed a brief spike in popularity during the height of the pandemic, while annuity sales have recently surged,” said Brian Armstrong, director of insurance intelligence at JD Power. “Now, with more customers than ever engaging with life insurance and annuity providers more often through digital channels, we’re starting to see a real evolution.”
Should You Buy Life Insurance When You’re Young?
It might be said that one of the last things on your mind is buying life insurance when you’re young and healthy, but if you’re between the ages of 20 and 40, now might actually be the best time to invest in your future.
In addition, there is generally less chance of being denied a life insurance policy when you are young, and policies are generally more affordable than when you are older. In fact, the monthly payment on 30-year term life insurance can cost less than a few Uber rides or dinner at your favorite restaurant, and the protection means one less thing for your family to worry about.
In much the same way, a retirement plan like an annuity can provide reliable income when you need it and can often bridge the gap between your accumulated savings and Social Security or other sources of income after retirement. Plus, annuities grow tax-deferred, meaning interest earned in a deferred annuity is not taxed until it is withdrawn.
About the findings
JD Power’s 2023 US Individual Life Insurance Survey measures overall customer satisfaction with the largest individual life insurance companies in the US. The survey is based on responses from 5,588 individual life insurance customers. The US Individual Annuity Survey measures overall customer satisfaction with the largest US annuity companies from 3,579 individual annuity customers. Each survey was conducted between May and July 2023.