Arlington, Va. and Windsor, Conn., — Nearly one third of consumers (31%) say COVID-19 has made it more likely they will purchase life insurance within the next 12 months, according to initial findings from the 2021 Insurance Barometer Study.
The study, conducted jointly by nonprofit industry trade associations LIMRA and Life Happens, finds Millennials (ages 22-40) seem to be most influenced by the pandemic when it comes to coverage. Forty-five percent of Millennials said they are more likely to buy life insurance due to COVID-19 than Baby Boomers (15%) or Gen X consumers (31%).
“COVID-19 has raised awareness about the important role life insurance plays in families’ financial security. Our research shows 42% of Americans would face financial hardship within six months if the primary wage-earner were to die unexpectedly,” said David Levenson, president and CEO, LL Global, LIMRA and LOMA. “Young Americans, in particular, are at most risk — more than half of Millennials have no life insurance coverage. The good news is 48% of Millennials say they plan to buy coverage in the next year. While we know not all will follow through, our industry needs to help these young adults get the appropriate coverage that will protect their families.”
Two-thirds of Millennials surveyed say they have dependents under 18 living in their households. It is understandable then that the current study finds 43% of Millennials are more concerned than other generations about leaving their dependents in a difficult financial situation if they should die or burdening others with burial/funeral expenses.
“The silver lining to this pandemic for our industry is that the awareness of the value of life insurance is at an all-time high,” said Faisa Stafford, LUTCF, president and CEO of Life Happens. “Twenty-two percent of insured Americans (29 million) believe they need more life insurance. For those without coverage, 59% say they need life insurance, which represents 73 million Americans. As educators about the importance of life insurance, we know that when people understand the need for life insurance and purchase it, they can take control of one important aspect of their financial futures.”
U.S. life insurance ownership trend continues
Interest in life insurance remains high, but life insurance ownership has fallen slightly in 2021. Just 52% of American adults report having life insurance coverage, down from 54% in 2020. The study found ownership of individual life insurance has remained level over the past four years at 39%.
“Despite the record-low life insurance ownership, Americans’ intent to purchase life insurance is at an all-time high,” Levenson commented. “This is why LIMRA and Life Happens joined six other trade associations and more than 60 companies to launch the Help Protect Our Families campaign. We are working together to help our industry — carriers and distributors — engage consumers who lack adequate life insurance coverage to protect their families’ financial futures.
These are initial findings from the 2021 Insurance Barometer Study. This is an annual study, tracking the financial perceptions, attitudes and behaviors of consumers in the United States, with an emphasis on life insurance. The final study results will be released at the 2021 Life Insurance Conference on April 12, 2021.
In January 2021, LIMRA and Life Happens engaged an online panel to survey adult consumers who are financial decision makers in their households. The survey generated over 3,000 responses. The results were weighted to represent the U.S. population.
About Life Happens
Life Happens is a nonprofit organization dedicated to helping consumers take personal financial responsibility through the ownership of life insurance and related products. The organization does not endorse any product, company or insurance advisor. Since its inception in 1994, Life Happens has provided the highest quality, independent and objective information for people seeking help with their insurance buying decisions. To learn more, visit www.lifehappens.org.
Serving the industry since 1916, LIMRA helps to advance the financial services industry by empowering nearly 700 financial services companies in 53 countries with knowledge, insights, connections, and solutions. Visit LIMRA at www.limra.com.