Improved economic conditions, favorable pricing and better customer engagement have driven customer satisfaction with U.S. life insurance plans to a record high, according to the J.D. Power 2017 U.S. Life Insurance Study.

"U.S. life insurers have been doing a great job of converting increased demand into more engaged, more educated and, ultimately, more satisfied customers," said Gregory Hoeg, Vice President, Insurance Practice at J.D. Power. "As improving economic conditions have driven more interest in life insurance plans, the industry leaders have seized on that momentum as an opportunity to help customers better understand their policies and billing statements, which improves their perception of the value they receive for the money they spend on premiums—a critical component of insurance customer satisfaction."

Following are key findings of the study:

• Record high customer satisfaction: Satisfaction among individual life insurance customers has reached an all-time high of 785 (on a 1,000-point scale), up by a significant 16 index points from 2016.

• Price is a key driver of higher satisfaction: The increase in overall satisfaction among life insurance customers is being driven by improvements in all studied factors, but price emerges as the highest-weighted factor with the largest year-over-year improvement. Price satisfaction has jumped to 764 in 2017 from 747 in 2016.

• Improved engagement among new customers helps drive price satisfaction: Price satisfaction increases the most among newer customers—those who have a tenure with an insurer of less than four years—improving by 35 points in 2017, compared with a 13-point increase among those who have been customers for more than three years. The proportion of newer customers who say they "completely understand" their billing statements has increased by 20 percentage points year over year.

• Discounts matter, but wearables fail to gain traction: Discounts have a significant effect on overall satisfaction and particularly price satisfaction. The specific discounts driving the highest overall satisfaction are multiple policy discounts. The much-hyped use of wearables as a discount tool has failed to gain any significant traction as of this year's study.

Insurer Rankings

State Farm ranks highest in life insurance customer satisfaction for a fourth consecutive year, with a score of 853. State Farm is the industry leader in providing policy discounts (67% vs. 40% industry average). MetLife ranks second with a score of 812 and Pacific Life ranks third with a score of 808.