September is Life Insurance Awareness Month and what better time to recognize the public’s confidence in life insurers. Despite the economic declines during the pandemic which persist, confidence in life insurers has increased.
According to a LIMRA study, more consumers today have high confidence in life insurers. A study conducted this past May revealed that 4 in 10 consumers had “quite a bit or extreme confidence in life insurers.” The study went on to report that one third of life insurance policyholders had contacted or heard from their carrier since March and of those individuals, 7 in 10 were satisfied with the customer service they received.
Not Everyone Has Life Insurance, but Everyone Should
While those who have life insurance clearly value it and their insurers, many Americans still do not have life insurance. Specially, in LIMRA’s 2020 Insurance Barometer Study, it was reported that 46% of U.S. adult consumers do not own life insurance, but that 36% of those surveyed planned to purchase life insurance over the subsequent 12 month period. This study also learned that:
- 44% of those surveyed said they would feel a financial impact within six months if the primary wage earner were to pass away, while 28% said they would feel this impact within one month.
Top Reasons for Owning Life Insurance
These are sobering findings and make a strong case for life insurance. Other reasons cited in the 2020 Insurance Barometer Study for why individuals purchase life insurance include:
- Paying for one’s burial costs and final expenses (84%)
- Transfer of wealth across generations (66%)
- Replace lost wages/income (62%)
- Supplementing retirement income (57%)
- Paying off the mortgage (50%)
Buy Life Insurance Sooner than Later
There are considerable cost advantages to purchasing life insurance at a younger age. That’s when individuals can purchase coverage at a much more affordable rate. One problem is that many young people have misconceptions about how much life insurance actually costs. LIMRA found that nearly 50% of Millennials thought that the annual cost for a $250,000 level-term life insurance policy for a healthy 30-year old is $1,000 or higher. In reality, the cost is nearer to $160 per year.
Dispelling young people’s misconceptions about the cost of life insurance and encouraging them to purchase it at the earliest possible age is especially important today as we grapple with an unprecedented health crisis in the COVID-19 pandemic.
