The Waiting Game Isn't About Life Insurance
By Feby Francois
The American public no longer has an excuse for not purchasing life insurance. Those without life insurance desire more convenience in the process, citing that they haven't been approached about it (46%), the product isn't offered by their employer (42%), and they haven't gotten around to it (62%).
Despite the COVID-19 pandemic, there is a silver lining: obtaining life insurance has never been easier. Therefore, no one has a reason to delay purchasing life insurance-especially the 31% of people who say they're more likely to buy life insurance because of the pandemic and the 47% of people who haven't gotten around to it.
We also found that people don't regret buying life insurance. The majority of those who own life insurance regret not buying it sooner, with 39% saying they wish they'd bought it at a younger age.
Little action, but high interest
Additionally, the survey found that life insurance interest is at an all-time high. The current number of people without life insurance is more than half (59%) who say they need it. There are five primary reasons why uninsured individuals do not own one:
81 % of respondents said it was too expensive
The other financial priorities at the moment (75%)
No idea how much to buy / what type to purchase (65%).
I haven't taken the time (62%)
Don't like to think about death (51%)
Despite the obstacles uninsured Americans face in buying life insurance, these obstacles shouldn't be stopping them from getting it in the first place. Let me explain.
There are no real roadblocks, only myths
There is a myth that life insurance is expensive. More than half of people believe term life insurance is too expensive, believing it’s three times or more than it actually is. 44% of millennials believe the annual cost of 20-year $250,000 level term life insurance for a 30-year-old healthy would be more than $1,000, when in reality it's closer to $165.
Although there are many myths and reasons not to have life insurance, the pandemic did lead many to purchase it for the first time, with millennials (24%) and black Americans (17%) the most likely to have done so.
Another myth is that life insurance is difficult to obtain. Since the pandemic last year, life insurance companies have focused on helping consumers buy online and from home. In addition to simplifying the underwriting process, simplified underwriting has influenced the likelihood of consumers to buy coverage. 48% of respondents said they are more likely to buy coverage via simplified underwriting, with the top benefits being that it is fast and easy (64%) and does not require a medical exam, blood test, and urine sample (56%).
Finance and Gender Gap
Among the Barometer findings, more men than women agreed with common myths about life insurance. A greater proportion of men (35%) compared to women (22%) believed that coverage from an employer's life insurance plan is generally sufficient. Furthermore, only 22% of women said they were very or extremely knowledgeable about life insurance, compared with 39% of men. In 2020, only 11% of women obtained life insurance for the first time. Instead, 29 percent of women were concerned about paying monthly bills, while 26 percent were concerned about saving money for an emergency fund.
New concerns and shifting priorities
As a result of COVID-19, Americans' financial concerns and priorities have changed. If the primary wage-earner died unexpectedly, 42% of Americans would face financial hardship within six months. This illustrates how important adequate life insurance coverage is to protect a family's financial future. Life insurance can serve as a source of security for people whose financial concerns have risen by 20% in the last two years. Nearly half of respondents (45%) said that they have put off purchasing life insurance, making it clear that now is the time to act.
Everybody has a reason for doing what they do
Over the past few years, the reasons Americans say they own life insurance have changed, with burial/final expenses showing a huge drop from 91% in 2018 to 83% in 2021. In addition, supplemental retirement income jumped to 63%, followed by wealth transfer/inheritance at 68%, which came in second.