Key Findings in Life Insurance Studies by J.D. Power & Others
- LIR TEAM
- 4 days ago
- 4 min read
Life insurance, annuities, long-term care (LTC), and disability insurance are some of the most complex financial products consumers will ever own. Yet they are often purchased quickly, explained briefly, and rarely reviewed again. Recent industry research by J.D. Power reinforces what we see every day at LifeInsuranceReview.com (LIR): most policyowners do not fully understand what they bought—and many professionals don’t realize the risks of that gap.
This article highlights key findings from major J.D. Power life insurance studies, explains why independent second opinions matter, and shows why both consumers and referring professionals should work with a Licensed Life Insurance Analyst before problems arise.
Why J.D. Power Life Insurance Studies Matter
J.D. Power studies are widely respected because they capture real consumer experiences, not marketing claims. Their research consistently shows that complexity, poor communication, and
weak disclosure undermine policyholder confidence and outcomes.
At LIR, we routinely review policies that were sold years ago—sometimes decades ago—where the client was never encouraged to fully review the contract, even during the 10–30 day free-look period.
Many of the problems we uncover could have been avoided if an independent policy review had been done immediately after delivery.
Key J.D. Power Finding #1: Complexity Keeps Customers From Fully Understanding Their Policies
One of the most important findings from J.D. Power’s life insurance research is that policy complexity is a major barrier to understanding.
Life insurance and annuity contracts often include:
Non-guaranteed assumptions
Multiple charges and expense layers
Indexed crediting methods
Policy statements that don’t clearly show long-term risks
As a result:
Consumers overestimate guarantees
Professionals assume the carrier explanation is sufficient
Policyowners don’t realize risks until years later
This is especially common with:
Indexed Universal Life (IUL)
Fixed Indexed Annuities (FIA)
Long-Term Care hybrids
Premium-financed strategies
A Licensed Life Insurance Analyst is trained to analyze the contract itself, not sell it—making them uniquely qualified to identify hidden issues.
Key J.D. Power Finding #2: Rethinking the Life Insurance Statement
J.D. Power also found that life insurance statements often fail to communicate what truly matters.
Many statements:
Focus on current values, not sustainability
Hide policy charges and cost of insurance
Do not clearly explain future lapse risk
Are written for compliance—not comprehension
This aligns with what we see daily:
👉 Consumers believe their policy is “doing fine” because the statement looks stable—until it suddenly isn’t.
Independent reviews translate these statements into plain-English risk assessments.
Infrequent Communication Is a Systemic Problem
Another major concern identified in industry research:
58% of agent/advisor relationships are considered “disengaged” or “transactional”(no contact for more than three years)
Only 19% of customers report having a “trusted relationship” with regular, proactive communication
This lack of follow-up is dangerous for long-duration products where:
Assumptions change
Performance drifts
Policy costs increase with age
An independent analyst review does not depend on sales cycles or commissions—it focuses on ongoing suitability and sustainability.
Consumers Still Want a Human Advisor—Not Just AI
Despite advances in AI and digital tools, a 2024 survey found that 88% of adults prefer speaking with a human advisor when making insurance decisions—especially for complex products like life insurance and annuities.
AI can help educate, but:
It cannot review your actual contract
It cannot act as a fiduciary analyst
It cannot replace professional accountability
That’s why we encourage consumers to use AI as a starting point, not a final decision-maker—and to pair it with an independent licensed expert review.
Why the Free-Look Period Is Critical (and Underused)
Most consumers don’t realize they have 10–30 days after policy delivery to:
Review the full contract
Ask hard questions
Cancel without penalty
Unfortunately:
Many agents do not emphasize this
Many clients never read the policy
Problems surface years later—when it’s too late
A second-opinion review during the free-look period is one of the most powerful consumer protections available.
Why Professionals Refer Clients to LIR
Our success comes from CPAs, attorneys, trustees, and financial professionals who refer clients for independent reviews because they understand:
They reduce liability
They protect client outcomes
They add value without product bias
Most professionals—and consumers—don’t even know Licensed Life Insurance Analysts exist. Yet this role was created specifically to provide independent policy analysis, not sales.
Frequently Asked Questions (FAQs): Key Findings in Life Insurance Studies
1. What is a Licensed Life Insurance Analyst?
A Licensed Life Insurance Analyst is a state-licensed professional who reviews life, annuity, disability, and LTC policies for a fee, independent of commissions or sales incentives.
2. Why isn’t the selling agent’s explanation enough?
Selling agents are typically compensated by the product they sell. Analysts are compensated only for analysis, creating a fundamentally different incentive structure.
3. When should a policy be reviewed?
Ideally:
Immediately during the free-look period
At major life or financial changes
Before additional premiums are committed
When performance disappoints
4. Do professionals really need to refer clients out for reviews?
Yes. Referrals help professionals and there are many Key Findings in Life Insurance Studies that support this fact:
Document due diligence
Reduce exposure to disputes
Strengthen client trust
Focus on their core expertise
5. Can AI replace an independent policy review?
No. AI can educate, but cannot analyze your specific contract, assumptions, or long-term sustainability under real-world conditions.
6. What types of policies should be reviewed?
Common reviews include:
Life insurance (term, whole life, UL, IUL)
Annuities (fixed, indexed, variable)
Long-Term Care policies
Disability insurance
Premium-financed strategies
Final Thought: Awareness Is Protection
J.D. Power’s findings confirm what independent analysts have long known: Complexity + poor communication = consumer risk.
Whether you’re a consumer or a professional advisor, independent second opinions are no longer optional—they’re essential.
If a policy is being sold, owned, or relied upon, it deserves objective review before it becomes a problem.
