COVID Keeps Mortality And Insurance Top Of Mind, Survey Says

TAMPA--As COVID lurks in the shadows ready to rage at any moment, mortality awareness seems to be ever-present, with at least a third of consumers wanting to buy life insurance.

That was one of the findings from the 12th annual Life Insurance Barometer taken in January by LIMRA and Life Happens, with 31% of respondents saying that COVID has led them to consider buying life insurance in the next 12 months.

That equates to about 80 million Americans without life insurance and want to buy it, said Steve Wood, LIMRA senior analyst, who is scheduled to present findings this afternoon with Maggie Leyes of Life Happens at the 2022 Life Insurance Conference, sponsored by LIMRA, LOMA, Society of Actuaries and the American Council of Life Insurers. That is in addition to the 10% who have insurance and want more, equaling about 26 million people, totaling 106 million potential buyers.

Those numbers are consistent with last year’s results, leading to the question, what’s holding them back? The top four reasons are they think it’s too expensive, they have other financial priorities, they don’t know how to buy a policy and they don’t like to think about death, Wood said in previewing his presentation.

Although a third of respondents said they thought insurance was too expensive, more than half of the respondents (56%) overestimated how much a 20-year, $250,000 term life policy would cost for a healthy 30-year-old nonsmoker.

“A whole bunch of people overestimated by three times,” Wood said, illustrating the gap in understanding insurance. They had guessed the annual premium would be $500, rather than the $170 actual cost. Wood added that the guesses get better with age. Gen Z tended to overestimate most, with the older generations more on the nose with each bracket.

Wood was intrigued by those whose top obstacle was not wanting to think about death.

“People find it more uncomfortable than they do talking about religion and politics,” Wood said.

Researchers thought there might be a generational and cultural component to the reluctance to talk about death but that turned out not to be the case.

“Is this a cultural thing? Let's look at Black Americans, Asian Americans, Hispanics, whites – but it's universal,” Wood said about the results. “It's just something in the American psyche.”

Respondents were most uncomfortable talking about sexuality, with 56% rating it as a top concern. End-of-life discussions came in at No. 2 with 40% uncomfortable with it.

Americans might not like thinking about it but it is clear they know they have a problem. That’s because 44% of respondents said they would be affected financially within six months of the primary wage earner’s death.

“And a full quarter 25% of our sample said that would happen within one month,” Wood said. “When we read that stuff, it's terrifying how much savings people have. When you put these reports together, it's just rough out there.”

Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].

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