As we close out Life Insurance Awareness Month, we cannot ignore the generation that has led the way in life insurance ownership: the Baby Boomers. But despite beating all other generations with a 58% life insurance ownership rate, there is still a concerning need gap among this generation, especially considering this is a group of people who have almost all reached retirement age already.
In this blog post, we will explore the reasons why some Baby Boomers still don’t have life insurance, the financial challenges they face and why it’s never too late to try to get coverage and protect your family’s future and financial legacy.
Closing the Baby Boomer Gap: Understanding the Statistics
Baby Boomers, born between 1946 and 1964, clearly recognize the importance of life insurance, as many of them have already purchased policies early in life to protect their families and assets. However, even with their relatively high rate of preparation, there are still gaps in coverage that should be addressed.
The following are some of the reasons cited in LIMRA’s 2023 Insurance Barometer Study that point to why some Baby Boomers are still holding out on buying a policy:
- Retirement Concerns: A notable 31% of Baby Boomers worry about having enough money for a comfortable retirement, which has taken top financial priority and pulled their funds away from important protections like life insurance. However, this statistic underlines a common misconception about life insurance, as many people must not know that the right policy can be used to fund a healthy retirement — and one with significant tax advantages as well.
- The High-Cost Assumption: As we have seen throughout the generations, a substantial 47% of Baby Boomers report not owning life insurance because they perceive it as too expensive. While it is true that life insurance premiums can increase with age, there are various types of policies that can provide affordable coverage, especially if purchased early. While it is never too late to talk to a financial advisor to try to obtain coverage, this statistic does shine a light on the importance of life insurance awareness at an early age.
- Other Financial Priorities: Approximately 20% of Baby Boomers admit to not owning life insurance because they have other financial priorities, primarily paying for medical expenses and long-term care services. While these financial concerns are just as important as providing for your family’s future through life insurance, it begs the question as to whether these respondents know of the existence of living benefits and other innovative policy features that can help you pay for medical bills and long-term care while you are still alive.
31% of Baby Boomers are worried about having enough money for a comfortable retirement.
It’s Never Too Late
The good news is that it’s never too late for Baby Boomers to obtain life insurance coverage or reassess their existing policies. Here are some key considerations if you are a Baby Boomer experiencing a life insurance need gap:
- Affordable Options: Seek advice from a financial advisor or insurance expert to explore cost-effective life insurance options that suit your current financial situation.
- Annual Reviews: Your financial situation changes over time. If you already have a policy, it is essential to periodically review your life insurance coverage to ensure it aligns with your current needs and goals.
- Wealth Transfer: As 66% of Baby Boomers say they purchased a life insurance policy to help them transfer wealth to their descendants, it is vital to follow through and establish a well-considered estate plan that incorporates life insurance as a key component.
66% of Baby Boomers say they purchased a life insurance policy to help them transfer wealth to their descendants.
The Generational Perspective
Despite their progress, the need gap persists among the Baby Boomer generation. These high-cost assumptions, medical expense concerns and retirement priorities can all be addressed by the right life insurance policy, and it is important to spread awareness of all that life insurance can do to secure their financial futures. Remember, it is never too late to obtain coverage or reassess your existing policy to ensure it meets your needs.
Meanwhile, though Baby Boomers have set an impressive example by leading the way in life insurance ownership, it is important to consider the future. Following the data, it is unlikely that subsequent generations will reach the same level of life insurance ownership as the Baby Boomers. This poses a challenge for life insurance providers and reinforces the importance of promoting Life Insurance Awareness every year.
Agents may face an uphill battle in providing this fundamental tool to those who need it, but sharing the substantial benefits of life insurance ownership at every opportunity can help future generations protect their loved ones, build generational wealth and find financial security and peace of mind.
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