Most people in the United States say they would prefer to pay a flat fee instead of a commission to their insurance advisors. They aren't prepared to pay very much, though.

LIMRA recently asked Americans about their payment preferences when buying life insurance, and 6 in 10 indicated that they would rather pay a flat fee. About one quarter of the respondents had no preference about how their advisors are compensated, and just 14% would rather the financial professional be paid through a commission.

How much are they be prepared for insurance advice? LIMRA says Americans are willing to pay a median one-time fee of $75, and notes 7 in 10 are only prepared to spend $100 or less. Consumers are ready to pay slightly more for a comprehensive analysis of their financial situation with a median one-time fee of $100, but 62% still said they wouldn’t pay more than $100.

"They don’t know what to buy"

“In today’s world, most Americans are solely responsible for their financial security. Having a solid understanding about their finances, including their risks and needs, seems critical,” says Jennifer Douglas, research director, LIMRA Developmental and Strategic Research. “Prior LIMRA research shows that one of the top reasons people don’t buy life insurance they say they need is because they don’t know what to buy or how much they need.  The fact that the majority of Americans are unwilling to pay a realistic amount to get professional advice is troubling.”

LIMRA's study also found that 8 in 10 Americans want to know in advance how an advisor is compensated, and this is true of those who already work with an advisor and those who don’t. However, 84% of the respondents who have an advisor believes he or she provides excellent value.