Revealing Life Insurance Statistics from The Insurist Life Insurance Consumer Report Study (2022)

life insurance statistics

Consumer Life Insurance Statistics

Studying statistics helps life insurance companies develop new products, modify existing ones, and price them right for maximum profitability.

Understanding the life insurance marketplace also helps insurers know who to target with their advertising, how to present their marketing message, how to get different age groups to respond to ads, what causes certain people to buy, and many other variables that impact their bottom line.

Statistics like those you’ll see below can also help you be a better life insurance consumer. Seeing these numbers and the accompanying analysis will provide you with valuable “food for thought.” It will increase your awareness of the life insurance market and let you know how your peers are responding.

Throughout the article, you’ll see frequent mention of various age groups classified as Gen X, Gen Y, Gen Z, and Baby Boomers. For purposes of clarity, the different groups can be defined as follows:

Baby Boomers: born between 1946 and 1964 (currently age 58-76)

Gen X: born between 1965 and 1980 (currently age 42-57)

Gen Y (Millennials): born between 1981 and 1996 (currently age 26-41)

Gen Z: born between 1997 and 2012 (currently age 10-25)

Based on information compiled by Insurist*, here are some facts and figures concerning Americans’ knowledge and buying habits of life insurance, including a brief analysis of each area of the study’s results.

The Age Group Most Likely to Have Life Insurance

The age group most likely to have life insurance is Gen X (those age 42-57).

While many Baby Boomers are dropping their life insurance because of cost or no longer feeling the need to retain it, and many of those in Gen Y and Gen Z are not yet ready or sure they need life insurance, the members of Gen X are the most likely group to hold onto their life insurance.

Gen X-ers are primarily adults who are still working and have a spouse or adolescent children dependent on their income. They view life insurance as a valuable income replacement tool.

Many members of this generation are also homeowners. While many Boomers are downsizing and moving into apartments or assisted living facilities and Generations Y and Z are finding the price of homes beyond their reach, Gen X-ers have been working long enough to save and own a home. They maintain their life insurance to pay their mortgage off if they die so their spouse and children can remain in the family’s home.

The Age Group Least Likely to Have Life Insurance

The age group least likely to have life insurance is Gen Z (particularly those age 19-25).

The majority of the members of Gen Z between 19 and 25 are either still students, have recently graduated from college, don’t have a spouse or dependents, or don’t own a home. In most cases, they have no real or perceived need to own life insurance, and popular financial advisors confirm their beliefs.

How Marriage Affects Life Insurance Statistics

You are twice as likely to have life insurance if you are married (60.4% of married couples have life insurance).

The majority of married couples view marriage not only as a romantic partnership, they also see it as a financial partnership. Most married couples are two-income families, with both spouses contributing a paycheck. Their lifestyle is built on both incomes, and they have life insurance to protect their spouse and any other dependents if one of them passes away.

How Children Affect Life Insurance Coverage

If you have children under the age of 18, you are twice as likely to have life insurance.

Most parents worry about what will happen to their children if they die while the kids are still young and dependent on them. They want their children to remain in the house they’ve been growing up in so they can keep their friends and go to the same school. Parents also want their children’s college education and future to be secure if they die prematurely.

For this reason, they buy and keep life insurance to protect their children and for their own peace of mind. Life insurance companies have found new parents to be a very lucrative market throughout the years.

Do People Want “No Medical” Life Insurance If It Costs More?

78% of respondents would not pay more for a “no medical exam” life insurance product.

Most people who compare the cost of no medical exam life insurance and traditional life insurance requiring an exam are unwilling to pay the significant price difference between the two. Not only does no medical exam life cost more (although increased competition has led some insurers to lower premiums), the maximum amount of coverage insurers will issue is substantially lower and add-on riders are often not available.

Those aged 55 – 64 are most willing to pay more for life insurance that does not have a medical exam.

Baby Boomers between the ages of 55 and 64 are the generation most likely to have pre-existing health conditions that preclude them from being approved for standard life insurance. Instead, they have to buy higher-priced policies with fewer health questions.

Generation Z is least likely to pay more for life insurance to avoid a medical exam.

Being the youngest generation to buy life insurance, Gen Z is also the healthiest and can buy low-cost term life insurance or whole life insurance at very affordable rates. They see no need to pay more to avoid an exam.

Those that are married are most willing to pay more for life insurance that does not require a medical exam.

Married couples will pay more for no medical exam life because of their strong desire not to leave a spouse behind without money. Older couples, particularly those with health issues, often buy instant acceptance life insurance or guaranteed issue life insurance to pay for final expenses, like funeral and burial costs.

Where Do People Want to Buy Life Insurance?

Millennials, those aged 26 – 35, are the group most likely to purchase life insurance through an online agency.

Millennials were the first generation to “cut their teeth” on computers, both at home and at school. They are computer-savvy and very comfortable researching and buying online. Unlike many older Baby Boomers, most Millennials feel secure paying for goods and services online.

Generation X, those aged 36 – 45, are the group most likely to purchase through a local agent.

Gen X-ers are the most likely to purchase life insurance through a local agent because they are the generation most likely to be approached by a local agent. They now have more disposable income to pay for life insurance, and they have a greater need for life insurance protection (kids, homes, etc.).

Millennials are the group most likely to purchase life insurance from their home and auto insurance agent.

At this point in their lives, many millennials have built relationships with property and casualty agents who sold them home and auto insurance. As a result, they trust these agents when approached about buying life insurance coverage.

What Types of Insurance Policies Are People Familiar With?

Baby boomers are the group most knowledgeable about Universal Life Insurance.

Universal life insurance was first introduced in 1979. It quickly became very popular with Baby Boomers, the oldest of whom were in their early to mid-thirties, which were prime years to buy life insurance.

Generation Z is the group most likely to be unfamiliar with term life insurance.

Gen Z’ers are the group least exposed to all types of life insurance, including term life insurance. They are more familiar with buying stocks online and with cryptocurrency.

The life insurance type most people are knowledgeable about is term life insurance.

Term life is so well-known because most financial advisors believe life insurance buyers should “buy term and invest the difference.” Advisors spend much less time explaining permanent life insurance products than they do term life.

The insurance type with the least amount of people knowledge is universal life.

As universal life insurance has evolved over the past 40+ years, it’s become more complex because the cash value of universal life policies has become increasingly tied to investments (variable universal life) and market indexes (indexed universal life). Guaranteed universal life policies are also an option.

How Do People Want to Get Online Quotes?

 

92% of respondents said they would not supply their names, email, and phone to compare life insurance quotes.

People have become increasingly reluctant to provide personal information to companies or solicitors they’re not doing business with. Spam, robo-callers, and junk mail have led people to guard their private information carefully.

Millennials are the most comfortable providing their names, email, and phone numbers to compare life insurance quotes.

Millennials are hungry enough to learn about life insurance that they’re willing to give up some of their privacy to obtain the information they want. They know they can set up multiple email accounts to avoid spam, and they’re okay letting unsolicited calls go to voice mail.

Generation X is the group least likely to provide their names, email, and phone to compare life insurance quotes.

Gen X’ers grew up with their parents (Baby Boomers) being inundated with telemarketing calls during dinner and the mailbox at the end of the driveway filled with junk mail, making them the least likely group to provide a means of being contacted.

Price vs. Convenience. Which Is More Important?

Over 75% of respondents think the price is more important than convenience when buying life insurance.

Instead of once only being able to buy life insurance at the kitchen table through a life insurance agent, people now have the convenience of buying it online, through the mail, and at work through group life insurance. They also have more life insurance companies than their parents ever had to choose from.

Because of that, life insurance is seen by many as a commodity, with price being more important than convenience.

Only 23%, 1/4th of respondents say convenience is more important than price when buying life insurance.

This segment of respondents would be comprised of more affluent life insurance buyers who are more concerned with efficiency and convenience than they are with price.

Those with children under age 18 value convenience the most when considering life insurance compared to pricing.

While price is important to these younger parents, time is at a premium for them. In addition to being busy with their children’s education and outside activities, they are also establishing their careers and working long hours. Convenience trumps the price when considering life insurance for parents with kids under 18.

Those that are single value convenience the most when considering life insurance compared to pricing.

While being among the smallest segment of life insurance buyers, single adults are also often busy building a career before they get married and have children. They typically have more disposable income than their married counterparts, and saving time takes precedence over saving money.

Those that are married were the most concerned about price over convenience when considering life insurance.

Married individuals buying life insurance are very likely to be parents, homeowners with a mortgage, and have multiple car payments. Their living expenses are typically higher than they’ve ever been for them at this time in their lives, making them very price-conscious.

Why Do People Not Buy Life Insurance?

The number one reason people do not purchase life insurance is they don’t think it is necessary.

People are living longer, healthier lives than they ever have, leading some people to believe they’ll outlive their need for life insurance and therefore don’t buy it.

Others are so consumed with escalating health insurance premiums, and they see that as a much greater need than they do life insurance.

When surveyed, health questions and a possible exam were the least likely reason for not purchasing life insurance.

The majority of life insurance buyers are younger and healthier. They have fewer pre-existing conditions and are not worried about having, or passing, a medical exam.

People are not purchasing life insurance because they don’t think it is necessary and the price is too high.

Along with not feeling the need for life insurance, many people believe that the value they receive doesn’t justify the price. A large percentage of Baby Boomers fall into this category, as do some Gen X’ers who are seeing their parents drop their coverage because they can no longer afford it on a fixed income and are more in need of long-term care insurance than they are for life insurance.

Is It Still True That People Overestimate the Cost of Life Insurance?

Many previous studies have stated that people overestimate the cost of life insurance. We found that this is no longer the case. The majority, 70% of people, estimate the cost of life insurance correctly.

With the abundance of life insurance information available online, including pricing, consumers are much more aware of the cost of life insurance.

Generation Z is most likely to overestimate the cost of life insurance. This is no surprise since the cost of term life insurance for those under 25 years old is 70% less than those 35 years and older.

Gen Z’ers buy the least amount of life insurance than any other group and are the least marketed to by life insurers. They are prone to base their estimates of the cost of life insurance on what they hear their parents or older siblings are paying.

*Insurist surveyed 1,503 people in the United States from an online paid survey. Age, gender, and location were random. The survey contained ten questions regarding life insurance, with Insurist compiling the results.