It’s Not a Waiting Game When It Comes to Life Insurance

by | Apr 20, 2022

Americans can no longer justify their failure to get life insurance. According to the 2021 Insurance Barometer Study, those who are uninsured want more convenience in the life insurance process, citing the fact that they haven’t been approached about it (46 percent), it isn’t offered through their employer (42 percent), and they haven’t gotten around to it (62 percent) as reasons for their lack of coverage.
However, there is a silver lining to the COVID-19 pandemic: getting life insurance has never been easier. This indicates that no one has a good excuse to wait to acquire life insurance, especially the 31% of individuals who say they’re more inclined to do so because of the epidemic and the 47% who say they haven’t done so yet.
Furthermore, our research indicates that people do not regret getting life insurance. In fact, 39 percent of individuals who have life insurance say they wish they had bought it when they were younger.
These findings come from the 11th edition of LIMRA and Life Happens’ annual Insurance Barometer Study, which looks at Americans’ financial attitudes and behaviors, with a focus on life insurance.

There’s a lot of interest, but there’s not a lot of action.

We also discovered that interest in life insurance is at an all-time high according to the poll. Moreover half of those without life insurance (59 percent) feel they need it now. The top five reasons for not having insurance, according to the uninsured, are: It’s too expensive (81 percent), Other financial priorities right now (75 percent), Not sure how much I need / what type to buy (65 percent), Haven’t gotten around to it (62 percent), and Don’t like thinking about death (51 percent).

The findings show that the barriers preventing uninsured Americans from receiving life insurance shouldn’t be there in the first place. This is why.

Myths aren’t the same as real roadblocks.

One of the most common misconceptions about life insurance is that it is prohibitively expensive. However, more than half of those polled overestimated the cost of term life insurance, estimating it to be three times or more than what it is. This was notably true among Millennials, who estimated that the yearly cost of 20-year $250,000 level term life insurance for a healthy 30-year-old would be more than $1,000, when the actual cost is closer to $165.
Despite these myths and reasons for not having life insurance, the epidemic prompted some people to buy it for the first time, with Millennials (24%) and Black Americans (17%) being the most likely to do so in the previous year.
Another fallacy is that getting life insurance is difficult. In the aftermath of the epidemic, life insurance companies shifted their focus to assisting people in completing their purchases online, from the comfort of their own homes. Simplifying the procedure with streamlined underwriting has also influenced the chances of a consumer purchasing coverage: Simplified underwriting is preferred by 48 percent of consumers, with the main benefits being that it is quick and easy (64 percent) and does not require a medical exam, blood or urine samples (56 percent).

The Gender Gap in Finance

According to the findings of the Barometer, more men than women agreed with typical life insurance fallacies. Men were 13 percent more likely than women to believe the fallacy that life insurance coverage through an employer is sufficient (22 percent). In addition, only 22% of women, compared to 39% of males, stated they were very or extremely educated about life insurance. This could explain why, as a result of COVID’s impact, only 11% of women got life insurance for the first time in 2020; instead, women’s top concerns were paying monthly bills (29%) and accumulating money for an emergency fund (26%) in 2020.

New Concerns and Shifting Priorities

COVID-19 has shifted all Americans’ financial concerns and priorities. According to the study, 42% of Americans would face financial trouble within six months if their primary wage earner died suddenly. This only emphasizes the importance of proper life insurance coverage in safeguarding a family’s financial future. Life insurance can be a source of security as people’s general financial concerns continue to rise—up 20% in the last two years. With nearly half of respondents (45%) stating they had put off obtaining life insurance, there is no better time than now to act.

We all have our own reasons for doing things the way we do.

There have been changes in why Americans say they own life insurance in recent years, with the most prevalent reason for owning life insurance—burial/final expenses—showing a dramatic fall from 91 percent in 2018 to 83 percent in 2021. At the same time, the number of people who possess life insurance for the purpose of boosting their retirement income has risen to 63 percent, followed by the transfer of wealth/inheritance, which has risen to 68 percent.

Methodology of Research

LIMRA and Life Happens commissioned an online panel in January 2021 to survey adult consumers who make financial decisions in their families. Over 3,000 people responded to the survey. The findings were weighted to reflect the population of the United States.