Life insurance ownership varies by age, gender and ethnicity, study finds

The glass is either half full or half empty for life insurance coverage in the United States, depending on a person’s perspective.

About half of all Americans reported having life insurance in the 2024 Insurance Barometer study from LIMRA and Life Happens. However, 42% of U.S. adults said they need life insurance or more of it, representing a life insurance-need gap for about 102 million adults. This gap has risen by 2 percentage points since 2021.

Households earning less than $50,000 a year were the least likely to have life insurance (56%), followed by Hispanic Americans (53%), Black Americans (49%) and women (46%). The survey results also indicate that a generational shift also is under way.,

“For the second consecutive year, millennials expressed the highest overall level of financial concern (36%),” the survey report said. “This aligns with their current life stages, marked by family formation, career advancement and the initiation of retirement planning.”

Gen Z’s concerns about its financial situation has increased eight percentage points in two years. Much of this may be attributed to the soaring cost of housing and other cost-of-living components. As the oldest Gen Z members approach 30, marriage and children become realities, along with a greater need for protection products such as life insurance.

The 11-point difference between women (46%) and men (57%) who have life insurance equals the largest gender gap in the 14 years of the barometer study. Fifty-four percent of women say they need, or need more, life insurance.

Survey respondents cited three primary reasons for not having insurance or not having enough coverage:

• Fifty-two percent said they don’t have insurance or inadequate coverage because it is too expensive.
• Other financial priorities. Nearly 8 in 10 overestimated the true cost of a basic term life insurance policy.
• Unsure of what to buy or how much they need. Fifty-four percent based their cost estimate on a gut feeling or wild guess.

Read more: Gen Z at work: A paradox of burnout, optimism, and connection anxiety

The study results point to opportunities for brokers who make the effort to educate customers about the importance of life insurance and present affordable coverage options.

“Many consumers are aware they need, or need more, life insurance, presenting a critical opportunity for the industry to engage, raise awareness and educate on the importance of life insurance,” the report concluded. “Understanding various levels of financial stress at different life stages for generations is important for aiding and educating prospective life insurance buyers, which over time can bridge the need gap and simplify the complicated world of life insurance for consumers.”