The pandemic has highlighted something most people don’t want to think about — what would happen to their loved ones should they unexpectedly die. According to new findings from the 2021 Insurance Barometer Study, conducted annually by LIMRA and Life Happens, 42% of American households would face financial hardship within six months should a wage earner die unexpectedly; 25% would suffer financially within a month.
While the pandemic has raised consumer awareness about the need for life insurance and almost a third (31%) of Americans say they are more likely to buy because of COVID-19, many are often deterred because of misconceptions about life insurance. These misconceptions may be why 48% of Americans are uninsured and many more don’t have the amount of coverage they need to adequately protect their families.
The reality is life insurance is more affordable and accessible than most consumer think. More than half of Americans overestimate the cost of life insurance by as much a three times its actual cost.
Another obstacle consumers cite is their lack of understanding about how much and what kind of coverage they need. In fact, 65% of uninsured Americans fail to safeguard the financial security of their loved ones with life insurance, because they are not sure how or what type they need.
Consumers are also intimidated by the process — they think that it’s too complicated and takes too long. But advances in technology have streamlined the underwriting and application processes, making it easier to apply and quicker to be approved for life insurance. Actually, today more companies are approving insurance via automated underwriting than ever before with greater reliance on background checks and less reliance on paramedical exams.
Dispelling these misconceptions and to help ensure people follow through with getting the coverage protection they know they need, LIMRA has joined with seven industry trade associations on the Help Protect Our Families campaign. The campaign aims to support carriers and financial security professionals engage and educate consumers about the importance of life insurance and close the U.S. coverage gap.
The time has never been better to talk about life insurance. That’s why LIMRA is hosting a #ChatAboutLifeInsurance. We’ll cover topics like: What keeps people from buying it? Do people understand life insurance? What are some of the misconceptions around it?
Date: Thursday, May 20, 2021, from 1 to 2 p.m. EST
Where: Join us @LIMRAnewscenter on Twitter using your personal handle or your company’s handle.
Hashtag: Use and follow #ChatAboutLifeInsurance during the above timeframe.
LIMRA will moderate the discussion and drive the conversation on Twitter using the questions and statistics below. Remember to use the #ChatAboutLifeInsurance hashtag in each tweet. All statistics below come from the 2021 Insurance Barometer Study.
Q1: Less than a third of consumers say they are “very” or “extremely” knowledgeable about life insurance. What can the industry do to make life insurance easier to understand and buy? #ChatAboutLifeInsurance
Q2: The top four reasons uninsured consumers give for not having life insurance are:
- It’s too expensive (81%)
- Other financial priorities right now (75%)
- Not sure how much I need/what to buy (65%)
- Haven’t gotten around to it (62%)
How can the industry overcome these perceived obstacles and help more Americans become fully insured? #ChatAboutLifeInsurance
Q3: Millennials are among the least likely to be insured but are most likely to express interest in buying life insurance within the next year. Less than half of Millennials (49%) have life insurance but 47% say they intend to buy within the next year. What are the best strategies to engage Millennials and ensure these young families obtain the coverage they know they need? #ChatAboutLifeInsurance
Q4: Life insurance ownership among women has been falling for the past five years. Today, just 47% of women have life insurance coverage, compared to 58% of men. While nearly a third of uninsured women (32%) say they need coverage, just 31% say they intend to buy coverage in the next 12 months. How can the industry better engage women and help them get the coverage they need to protect their families? #ChatAboutLifeInsurance
Q5: As a result of the pandemic, most life insurers offer accelerated or automated underwriting to their customers. Almost half of consumers (48%) say they like the idea of avoiding seeing a doctor and undergoing a paramedical exam. Do you think this automation will help overcome resistance to buying life insurance? #ChatAboutLifeInsurance