Life insurance advisers may have an opportunity to add more value after a policy is sold, as new research points to a significant gap in clients' understanding of the coverage they already own.
The World Life Insurance Report 2027, from the Capgemini Research Institute and LIMRA, found that nearly 40% of policyholders rarely or never hear from their insurer after purchasing a policy. More importantly for advisers, many clients appear to have limited knowledge of their policy's features and flexibility.
Only 29% of policyholders surveyed are aware of flexible premium payment options, while just 22% know about features such as grace periods or loans against policy cash value. More than a quarter of those who surrendered or cancelled coverage cited a lack of understanding of benefits and liquidity options as a key reason.
For advisers, this suggests that the traditional policy review could take on greater importance. Rather than being primarily an administrative exercise, regular reviews can provide an opportunity to revisit why the policy was bought, explain features that clients may have overlooked and assess whether their protection needs have changed.
The opportunity is particularly relevant with younger consumers. Among those aged 18 to 40, 54% are considering buying life insurance, yet 28% abandon the process before completing it. The report notes that younger US consumers can also substantially overestimate the cost of life insurance, suggesting that perceived affordability can become a barrier before a meaningful advice conversation takes place.
At the same time, technology is changing how clients approach insurance. More than half of consumers surveyed plan to use generative AI to research and compare products, but two-thirds still prefer human advisers when finalising coverage decisions.
For advisers, the implication is less about competing with AI than becoming more useful when clients have already done their own research. Advisers can help test assumptions, explain policy terms, put coverage in the context of a client's circumstances and continue that conversation after the sale.
The report's findings suggest that the adviser relationship may increasingly be defined not by the ability to complete a transaction, but by the ability to remain relevant throughout the life of the policy.