Life Insurance Is on People’s Minds

The 2021 Insurance Barometer Study, by Life Happens and LIMRA, shows that while myths around life insurance persist, COVID-19 has shown people that they have a clear need for life insurance, with the industry making it easier than ever before to obtain coverage. In fact, 31% of consumers said they are more likely to buy life insurance because of the pandemic.APRIL 2021

There is a heightened awareness of the need for life insurance

• 59% who don’t own life insurance say they need it
• 31% say they’re more likely to buy life insurance because of the pandemic
• 48% of Millennials say they plan to buy coverage in the next year
• 42% of Americans would face financial hardship within 6 months if the primary wage-earner were to die unexpectedly

Awareness has led some to take action with 13% of consumers saying they purchased life insurance for the first time in 2020.

Myth-Busters

According to the survey, about a quarter of people accepted five common myths and misconceptions about life insurance. Some of the top reasons they have for not owning life insurance (they can choose more than one)

• 81% – It’s too expensive
• 75% – Have other financial priorities
• 65% – Not sure how or what type to buy
• 62% – Haven’t gotten around to it
• 51% – Don’t like thinking about death

One of the biggest myths around life insurance is that it’s expensive, but the majority of people overestimate the true cost of life insurance by 3x or more and 44% of Millennials thought the cost of term life insurance policy was more than $1,000 a year when it’s closer to $160.*

Easier to Get

Another misconception is that it’s difficult to obtain life insurance, and so people procrastinate. But in response to the pandemic, life insurance companies have pivoted to help consumers expedite the buying process online, from their homes. They are also streamlining the process with simplified underwriting, which influences the consumer’s likelihood to buy coverage: 48% say they are more likely to buy via simplified underwriting, with the top benefits of this process being that it is fast and easy (64%) and avoids the medical exam, blood and urine samples (56%).

The data shows that people don’t regret purchasing life insurance – in fact, they regret not purchasing it earlier: 39% say they wished they’d purchase their life insurance at a younger age.

*20 year, $250,000 level term life insurance policy for a healthy 30-year-old

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