Many Say Life Insurance Is More Important than Ever

Seventy-eight percent of consumers, surveyed by ING, say that life insurance is a valuable tool for estate or financial planning and 53% say that the economy has made life insurance even more important. However, 51% say that priorities, such as paying off debt or a mortgage, are major obstacles to purchasing life insurance. Meanwhile, 61% have never calculated their life insurance needs and only one-quarter of the insured are confident that they had enough coverage. While 62% identify family as the number one reason to buy life insurance, many couples avoid discussing the issue.

Forty-five percent of spouses rarely or never talk to each other about what would happen to the family finances if one of them died. Respondents are most familiar with the protection benefits of life insurance; they see the greatest value in more obvious uses, such as replacing lost income (26%) and paying off debt (23%). Very few cite its value to protect retirement savings (4%) or build wealth (1%).

Forty-four percent of Americans have little or no confidence that they have enough life insurance coverage. Twenty-three percent of 25- to 34-year olds say they are too young to buy life insurance.

Forty-nine percent look to their employer as their only source for insurance coverage. Employees without access to life insurance benefits at the workplace are seven times more likely to have no coverage at all. People who bought life insurance face-to-face with a financial professional felt the most confident and knowledgeable about their coverage. Among that group, 70% are very or extremely confident about their coverage compared to just 56% for all insured respondents.

The study also reveals the following:
• 54% of parents have not calculated how much life insurance they need.
• 51% of uninsured Americans say they can’t afford life insurance despite historically low rates.
• 56% of those with life insurance only have coverage that meets up to three times or less of their annual salary.
• 27% say they should have five to 10 times their annual salary in coverage. However, only 17% of insured respondents actually have this amount.
• 50% of insured respondents know somebody who has been helped by life insurance compared to only 34% of uninsured respondents.

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Last Updated 06/29/2022

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