The U.S. life insurance industry is navigating a complex landscape characterized by rising operational costs, declining customer numbers and sluggish premium growth. To succeed, it is not enough to boost sales—sustainable growth demands reducing the cost to serve while optimizing client retention and cross-sell opportunities. To maintain profitability while enhancing customer satisfaction, insurers must strategically balance cost containment with robust client engagement.

To do this, carriers must overcome 3 key strategic challenges to organic growth.

To balance cost containment with robust client engagement, life insurance carriers should focus on the following 3 areas.

Transparency and clarity in life insurance are essential for building trust and empowering customers to make informed decisions. By simplifying complex policy language and focusing on individual needs and life goals, insurers can foster stronger relationships, particularly with younger, digitally native consumers. Clear communication reduces confusion, mitigates misunderstandings, and enhances customer satisfaction, ultimately leading to improved retention and loyalty.

Where should you start?

Focus on People Not Product

The challenge: Traditional sales-driven approaches emphasize product features and benefits, often overwhelming customers. Modern consumers expect personalized financial guidance.

The recommendation: Shift the narrative to focus on individual needs, life goals, and long-term value builds trust and relevance, especially among younger and digitally native demographics.

Why is this important?

20%

of current life insurance customers say the product doesn’t completely meet their current needs.

24%

of current life insurance customers say the product doesn’t completely meet their future needs.

55%

of life insurance customers said their advisor/agent hasn’t asked them about the needs of their beneficiaries.

Source: J.D. Power 2024 U.S. Individual Life Insurance Study

Communicate Effectively

The challenge: Life insurance language is often complex and jargon-heavy, creating a barrier to understanding and decision-making.

The recommendation: Insurers must invest in simplifying product explanations and tailoring communication to various life stages, literacy levels, and digital channels, ensuring clarity without sacrificing regulatory accuracy.

Why is this important?

36%

of current life insurance customers don’t completely understand the terms of their policy. 

40%

of current life insurance customers don’t completely understand the costs and fees associated with their policy.

25%

of current life insurance customers said they haven’t received any form of communication in the past 12 months.

Source: J.D. Power 2024 U.S. Individual Life Insurance Study

Consumers expect fast, seamless service in life and life insurance—whether applying for a policy, reviewing a statement, or paying a bill. To meet these expectations, insurers must first ensure they have a good understanding of what consumers expect from digital tools and then implement digital solutions in a way that streamline operations, minimize effort, and are easy to use. Digital enablement is about more than the technology, it’s about ensuring awareness and supporting adoption.

What do customers expect your digital channels to be?

Efficient

The challenge: Consumers expect fast, frictionless service—whether they’re applying for a policy, reviewing their statement or paying a bill. Long waits, paperwork, and redundant steps cause frustration and abandonment.

The recommendation: Digital tools that streamline processes, minimize effort, and are easy to use / navigate save time, create an experience that increases customer engagement and satisfaction while lowering the cost to serve.

Why is this important?

↓

Despite being the most common method to apply, life insurance customers who said they applied online rated the ease of the process, speed and overall experience lower than all other methods except for those that mailed in a paper application.

55%

of life insurance customers said that their most frequent method to review their statement was ‘traditional paper’. NPS for those using traditional paper is 16 points lower than those who use digital most frequently.

Source: J.D. Power 2024 U.S. Individual Life Insurance Study

Convenient

The challenge: People want to engage with insurers on their terms—anytime, anywhere, on any device. Whether it’s accessing policy documents through a mobile app, chatting with a virtual assistant at night, or scheduling a callback at their convenience, digital convenience builds confidence and loyalty.

The recommendation: If a customer can book a vacation or open a bank account with a few taps, they expect the same from life insurance.

Why is this important?

57%

of current life insurance customers strongly agree that they expect their life insurer to allow them to manage their account when and how they want...

43%

...but only 43% of current life insurance customers strongly agree that their life insurer actually does allow them to manage their account when and how they want.

Source: J.D. Power 2024 U.S. Individual Life Insurance Study

Effective

The challenge: Consumers appreciate personalized and relevant interactions. When digital platforms use their data thoughtfully—such as reminding them of a coverage review after a life event or recommending a product that fits their family’s needs—it shows that the company understands and values them.

The recommendation: Effective digital enablement means anticipating needs and making meaningful engagement easy and intuitive, not generic or one-size-fits-all.

Why is this important?

52%

of current life insurance customers strongly agree that they expect their life insurer to provide a seamless experience across channels and contact methods...

37%

...but only 37% of current life insurance customers strongly agree that their life insurer actually does provide a seamless experience across contact methods.

Source: J.D. Power 2024 U.S. Individual Life Insurance Study

Consumers compare life insurance experiences not only with other insurers but also with top-tier brands in other industries. To meet these elevated expectations, insurers must provide consistent, high-value interactions that match the speed, personalization, and care consumers experience elsewhere. Every touchpoint is an opportunity to understand the customer better and build emotional resonance. Moving from a transactional relationship (price, policy, payout) to a trusted advisory role requires continuous engagement, transparent guidance, and education—transforming insurers into lifelong partners in financial wellness and legacy planning.

What do carriers need to keep in mind?

Expectations Are Set Everywhere

The challenge: Customers compare their life insurance experiences not just with other insurers, but with top-tier brands in wealth, banking, and other sectors.

The recommendation: Insurers must rise to the challenge by providing consistent, high-value interactions that match the speed, personalization, and care consumers experience elsewhere.

Why is this important?

51%

Among Life Insurance customers 51% gave a top 2 box rating for overall trust, but this can go as low as 33% among individual carriers.* 

47%

of current life insurance customers strongly agree that they expect their life insurer to have advanced technology capabilities...

33%

...but only 33% of current life insurance customers strongly agree that their life insurer actually does have advanced technology capabilities.

*For comparison, among Advised Investors the average top 2 box trust rating was 64%, 56% among DIY Investors, and 53% among Banking customers.

Source: J.D. Power 2024 U.S. Individual Life Insurance Study

Interaction Allows for Intimacy

The challenge: Every touchpoint is an opportunity to understand the customer better and build emotional resonance.

The recommendation: Whether it's a birthday message, sharing tips to improve wellness, or proactive policy review, these moments deepen relationships and increase loyalty—if handled with empathy and relevance.

Why is this important?

28%

More than 1 in 4 life insurance customers (28%) have never used their insurers website. Their average NPS score is less than half the NPS of  customers who have logged in within the past 12 months.

35%

Among customers who worked with an agent to get their life insurance, 35% have had no interaction with the agent/advisor in more than 3 years.  Only 31% of customers that worked with an agent and 26% of those working with a financial advisor for life insurance had contact in the last 12 months.  

Source: J.D. Power 2024 U.S. Individual Life Insurance Study

Shift from Transactional to Trusted 

The challenge: Life insurance is fundamentally about long-term security.

The recommendation: Moving from a transactional relationship (price, policy, payout) to a trusted advisory role requires continuous engagement, transparent guidance, and education—transforming insurers into lifelong partners in financial wellness and legacy planning.

Interaction alone isn’t the answer.

26%

Among life insurance customers that have had an agent/advisor interaction in the past 3 years, 26% gave ratings of their agent/advisor that J.D. Power classifies as ‘Transactional’.  The average satisfaction for these customers is 553.  

32%

In contrast, 32% of customers give ratings that classify their relationship as ‘trusted advisors’ which results in average satisfaction of 799, a 246 point difference.  

Why is this important?

40%

More than 4 in 10 life insurance customers indicate that they don’t work as a team with their agent/advisor and they don’t agree that their agent/advisor makes recommendations that are in their best interest.

40%

Nearly 40% of life insurance customers say that their agent/advisor doesn’t explain things in terms they can understand.

Source: J.D. Power 2024 U.S. Individual Life Insurance Study