A Snapshot of 2024 Life Insurance Statistics

June 13, 2024
New data suggests that while life insurance is valued for the financial protection it provides

New data suggests that while life insurance is valued for the financial protection it provides, many misconceptions regarding this vital financial product prevail. Here are some of the more common misconceptions regarding life insurance along with the percentage of Americans who hold these false impressions based on various surveys.

Misconceptions Americans Have about Life Insurance

  • Less than 50% of respondents in a Forbes Advisor survey knew that health history and age are considered in life insurance quotes. Considered by insurers when creating a quote are age, health history, gender, smoking status, driving record, criminal record, finances, occupation, hobbies, and nicotine/marijuana use.
  • Approximately 53% of respondents said they would have reservations about applying for life insurance if they legally use marijuana, while 56% said they would lie about their usage when applying for life insurance to avoid paying higher costs.
  • Many Americans believe life insurance does not cover deaths related to illnesses including COVID-19 while the truth is that life insurance policies cover deaths from illnesses, heart attack or diseases, accidents, homicides and old age. Payouts can range from a few thousand dollars to several million dollars depending on the coverage amount that is purchased by the insured. Payouts are usually distributed within 30-50 days of a claim’s filing.
  • 28.4% of Americans believe that life insurance is three times the cost than it actually is. For example, the average annual cost for a 10-year term life policy with a face value of $250,000 for 40-year old male is $162 and for a 40-year old female is $149. The annual cost for a 40-year old male and female for a $250,000 whole life policy would be $3,520 and $3,148, respectively.

Who Does and Does Not Have Life Insurance?

  • 52% of Americans have life insurance. (LIMRA)
  • Life insurance ownership is 11% higher among men than women although nearly a third of women planned to buy insurance within one year. (LIMRA)
  • 46% of Hispanic-Americans have life insurance which is lower than any other ethnic or racial group, with black and white Americans averaging almost 10% points higher in life insurance ownership rates than Hispanic-Americans. (LIMRA)
  • 48% of Millennials and 40% of Gen Z have life insurance. (LIMRA)

With 66% of Americans expressing concern over their family’s financial situation should the primary earner pass away, those without insurance should be seeking the advice of an experienced insurance professional who can guide them to the best life insurance product for their needs.