Life Insurance Buying Behavior

Most of us really see to it that we will have better lives in the future. It is been our desires that we can live a life full of comforts and our needs are supplied and met. We sometimes look ahead of time or we go beyond in our horizons so that we can prepare what lies ahead of us especially when we will grow old. Because of this, we tend to get life insurance to secure our unknown future. This kind of trend is very popular in Toronto, Canada as well as around the globe.

But before we go further to our thorough discussions, we must know first what is life insurance and what are the possible benefits that we could get from it. When we say life insurances, it occasionally pertains to as life insurance which arranges for a sum or disbursement of money upon the death of the insured. Moreover, life insurance can also used as a way or method of saving or investment. Through this, we can receive many benefits. The insurance on human lives include benefaction benefit, supplementary benefits in event of death or disarticulate by accidental means or accidents, supplementary benefits for annuities and disability. There are several kinds of life and relative insurance products. The people or the public alters and the necessity for life insurance alters in analogy.

The purposes of this study are to understand the buying behavior of life insurance at Toronto, Canada and the reasons why they buy life insurance.

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*Buying behavior of life insurance in Toronto and its reasons why buys it*

In a study conducted in March 14, 2006 and entitled “Life Insurance: Like ‘Deal or No Deal’ without the Drama” advocated that “what does the game show “Deal or No Deal” have in similar with life insurance. Kerzner concluded that both are the same because like in a game, contestants are sweating out with regards to their decision in order to be in the right track so that they can get the jackpot. Same as buying life insurance because buyers go through such experience due to its big amount of money involve. In a LIMRA research, it presents that several people delay or postpone in spite they learn that they need more life insurance. In a survey made by LIMRA of both non-buyers and buyers of life insurance, only 4 out of 10 non-buyers commented that they were scared of making wrong choice or conclusion and half of it explained that they couldn’t choose how much to buy and 70 percent answered that they could not afford it. Kerzner added that:

"Behavioral economics tells us that when people say they can't afford life insurance, even when they admit they don't have enough, there's more to it than a straight budget calculation," Kerzner said. "The negative feelings of 'losing' the premium for more insurance are often a lot stronger than the positive feelings of buying the needed protection."1

An article entitled “Increased protection for life and health consumers: CompCorp” stated that CompCorp guards Canadian policyholders in opposition to loss of benefits in the occurrence that life and health insurance company be unsuccessful. It was announced that its members favored and commended three improvements and augmentations to its consumer defense:2

Accumulated Values are fully protected up to $100,000;3

1 “Life Insurance: Like ‘Deal or No Deal’ Without the Drama. March 14, 2006. http://www.insurance-canada.ca/consinfolife/LIMRA-Survey-Life-Insurace-603.php 3-2 Ibid…

For Cash Values, CompCorp ensures that policyholders receive at least 85% of their promised benefits and, below $60,000, CompCorp ensures 100% protection;4

Guaranteed amounts of Segregated Funds are protected under Cash Value coverage and, as such, policyholders receive at least 85% of their promised benefits and, below $60,000, CompCorp ensures 100% protection

CompCorp protection puts in to every Canadian policyholder altogether with a current and prevailing product to any recent policies purchased from a member company.5  Another article stated that “in December 2003, Canadian life insurance application activity has enlarged and improved 3.5 percent as years by. Canadian life insurance application activity gauged and calculated as a percent of the sum in North American Life Index has enlarged over the years successively.

MIB Life Index- Percent Change

5 “Increased protection for life and health consumers: CompCorp”. July 7. http://www.insurance-canada.ca/consinfolife/CompCorp-enhancements-507.php

An article stated that there was a mass marketing. Corporations or companies advertised recent products and services to all their valued customers even though those products or services were suitable for the individuals on the mailing list of the company. When a certain bank presented a mass marketing movement, there is 1 percent up to 3 percent reply rate was well-thought-out successful. If the regular direct-mail movement costs a company about $98,000 to spread 100,000 customers, in accordance to its estimation from the New York City Direct Marketing Association that organization is getting a large amount of loss.6

6 “Slices of Lives”. http://www.cio.com/magazine

References

“Life Insurance: Like ‘Deal or No Deal’ Without the Drama. March 14, 2006. http://www.insurance-canada.ca/consinfolife/LIMRA-Survey-Life-Insurace-603.php
“Increased protection for life and health consumers: CompCorp”. July 7. http://www.insurance-canada.ca/consinfolife/CompCorp-enhancements-507.php
“2003 Annual Report”. http://www.mib.com/webcontent/2003%20MIB%20Life%20Index%20Annual%20Report.pdf
“Slices of Lives”. http://www.cio.com/magazine

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