Industry Insights is our quarterly round-up of recent news and data on the state of the insurance industry today. With the latest issue of LIMRA’s Insurance Barometer Study, a fuller picture of the 18-month influence of COVID-19 emerges — Americans have seen the toll that financial insecurity takes on families, and demand for life insurance is higher than ever before.
However, a coverage gap persists, as it always has, largely through misconceptions about how to purchase life insurance. Many families are mistaken about how much their coverage would cost, how complicated the process is and whether they would even qualify. This makes raising awareness of how to purchase life insurance one of the industry’s top priorities, and Life Insurance Awareness Month as important as ever. Check out the reports and studies below for the full story.
Study Finds COVID-19 Spurs Greater Interest in Life Insurance
COVID-19 left 31% of consumers more likely to buy a life insurance policy in the next years, with Millennials emerging as the generation with the greatest increase in demand at 45%. Financial security and family protection are on the minds of millions — 42% of Americans would fall into financial hardship should their primary wage earner pass away — while awareness of the value of life insurance skyrockets.
This leaves a gap between America’s record-low life insurance ownership rate and the demand for coverage reaching an all-time high. This gap is largely caused by hesitancy due to misconceptions about the process of buying life insurance.
How can we close the gap between demand and ownership? Read the full study for Life Insurance Awareness Month to get a bigger picture of this rise in demand and how agents can bring families the financial security they need.
Common Misconceptions Prevent Americans from Getting Life Insurance They Need
While consumers understand the importance of life insurance now more than ever due to the pandemic, too many Americans are still mistaken about key aspects that keep them from buying coverage. These misconceptions include things like who would qualify for a policy, barriers of cost and concerns about a complicated buying process.
For example, 53% of potential buyers admit that they do not know what product they need or how much coverage is enough for them. 47% know they need coverage but have put off purchasing, while 36% believe they would simply not qualify for a policy when there is a chance they will.
Read this report from LIMRA for Life Insurance Awareness Month for the full study on consumer misconceptions so agents can better help the 102 million uninsureds who are simply unsure about how to buy.
New Study Finds Black American Life Insurance Ownership Increased During the Pandemic but a Significant Coverage Gap Remains
The number of Black Americans who own life insurance rose three percentage points from last year. These families now beat the general population’s life insurance ownership by four percentage points, making Black Americans more likely to own life insurance than any other race.
Still, a coverage gap persists as 19% of Black Americans who believe they need life insurance still do not own a policy. This gap stems from similar reasons to the general public’s, with 75% overestimating the cost of life insurance while many believe the policy they get through their employer is enough. This full study from LIMRA and Life Happens offers a snapshot of families who experience a higher level of financial concerns than others and how agents can help bridge the coverage gap to bring them peace of mind.