According to new findings from the 2022 Insurance Barometer Study, conducted jointly by nonprofit industry trade associations LIMRA and Life Happens, 2 in 5 parents say they are barely or not at all financially secure. This is increasingly critical, as most households haven’t prepared for the loss of a primary wage earner: 44% say it would take less than six months to feel financial hardship if this happened to their family.
Life insurance key to financial security
Financial insecurity transcends generations and is highest among Gen X (49%), followed by Millennials (44%), Gen Z (42%), and Baby Boomers (33%). One way to ease these concerns is life insurance. Two-thirds (68%) of life insurance owners report feeling financially secure compared with 47% of non-owners. Those who feel most secure are people who have life insurance both through the workplace and through individual coverage (78%).
“Life insurance is the foundation of any strong financial plan, and our results show it provides people with a sense of security that many are looking for, especially after the last two years,” said Faisa Stafford, LUTCF, president and CEO of Life Happens. “The lasting impact of COVID remains at the forefront for many, with the pandemic leading almost a third, or 31% of people, to say they are more likely to buy life insurance in 2022.”
Gender gaps extend to life insurance coverage
The need gap for life insurance—what people have versus what they say they need—is at an all-time high (18 points), more than double what it was 12 years ago. For the sixth consecutive year, the percentage of uninsured women has increased. Just 46% of women report owning life insurance, compared with 53% of men. However, a greater proportion of women than men recognize they need (or need more) coverage (44% versus 38%).
Despite their acknowledged need, just over a third of uninsured women (36%) say they plan to buy life insurance in the next year. The reasons women give for not having coverage include:
- It’s too expensive: 39%
- I have other financial priorities right now: 37%
- I’m not sure how much or what type to buy: 22%
“There are still over 100 million people in this country who don’t own enough life insurance” said David Levenson, president and CEO of LIMRA and LOMA. “And, while new policy growth jumped last year to the highest levels since 1983, there is still a lot that our industry can do to ensure that families are properly protected.”