Insurers expect 10% of middle-income Americans-those with household incomes of $35,000 to $80,000-to buy life insurance on-line by 2003, a survey found.

Furthermore, insurers predict another 10% will get quotes on-line and follow up with off-line purchases, according to the survey, by Conning & Co. of Hartford, Conn.

That would put eight million more households into the life insurance market by 2003.

"The tech-savvy have got their heads on their shoulders when it comes to financial matters, and they're not going to wait for an agent to come to them," said Mark Trencher, a Conning vice president who wrote a study based largely on the survey.

The number of middle-income Americans with life insurance decreased over the last two decades. During that time, term life insurance grew in popularity at the expense of whole life. Thinner margins on term insurance led many agents to look to more affluent customers whose insurance needs provided better margins.

And because sales of life insurance are typically driven by marketing, the lack of agent attention resulted in more people becoming uninsured or underinsured. In 1967 one household in eight bought insurance from an agent, compared with one in 17 in 1997, the study said.

The perception that life insurance is expensive persists even though term insurance is more affordable than ever, Mr. Trencher said. A policy worth four times household income cost 4.5% of the median household income in 1967 compared with just 2% today.

Internet and direct marketing could help change that misconception among people overlooked by traditional agents, Mr. Trencher said.

Millions of consumers are already scanning the Internet for information, he pointed out. For example, he said, 40% of auto buyers seek information on the Internet before buying.

But life sales over the Internet are still small-$200 million in premiums in 1998, about 0.2% of the industry total.

Insurers, who are worried about offending traditional agency forces, are more interested in the Internet for lead generation and as a research tool for customers, Mr. Trencher said. But the tendency toward agent protectionism is waning, he said.

Banks that sell insurance and marketing programs that sell insurance to consumers at their job could compete with insurance marketing on the Internet, Mr. Trencher said. However, both have yet to prove they can sell life insurance.

He said bank sales of life insurance are still inconsequential. And of those, 65% are to the bank's own employees, he said.

"Banks really have to figure out how they can sell insurance," Mr. Trencher said.

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