Life insurance gap between men and women continues to grow

The self-reported gap in life insurance ownership between men and women grew to its biggest point since the Insurance Barometer study began.

The most recent version of the study showed that 57% of men and 46% of women said they own life insurance – a gap of 11 percentage points.

Steve Wood, consumer markets research director for LIMRA and LOMA, presented some of the highlights of the most recent Insurance Barometer study during the LIMRA Life and Annuity Conference. The LIMRA and Life Happens Insurance Barometer examines the consumer attitudes and behaviors regarding a number of topics in the life insurance industry.

Why the large gap?

“I don’t really have a good answer for that and we’ve looked at all the data,” he said.

“Whichever way we looked at men versus women, the gap was still there. Women who are employed full-time versus men who are employed full-time – there was still a gap. High-income men and high-income women had the same gap. We just don’t know many of the whys behind it.”

Despite the life insurance ownership gap, consumers continue to say they need coverage.

The Insurance Barometer study showed that a majority of consumers said they either want to buy life insurance or that they need more of it.

“The tail of the pandemic seems to be reflected in this need gap,” Wood said. “It hasn't diminished since 2020. People still recognize the need and are still aware of the products and, more important, are aware of what they provide.”

Telling personal stories of how life insurance products helped individuals and families in a time of need is crucial to motivating consumers to buy coverage, Wood said.

“We see that in an online world, in a social media world, story after story about premature mortality and people not having any funds for even for final arrangements, let alone, generational wealth to pass on. And I think that really resonated with a lot of people.”

Something else that the Insurance Barometer study reveals is increasing interest in long-term care insurance from younger adults.

“Baby boomers are requiring more and more long-term care services. And their millennial and Generation X children are seeing the exorbitant costs of that care. We found in our data that interest in these types of products is significantly higher than it was when we asked about it in 2016 and in 2020,” Wood said.

The most recent Insurance Barometer asked members of the LGBTQ+ community about their interest in life insurance.

“We asked what barriers people perceive in buying life insurance, whether they feel they might be discriminated against,” Wood said. “The LGBTQ+ population did not report any difference in that feeling than any other demographic, Black Americans, Hispanic Americans, lower income Americans. But the LGBTQ+ level of distrust in agents and insurance companies was higher than that of other consumer groups. So LGBTQ+ consumers don’t feel discriminated against. They don’t necessarily trust the companies they work with.”

Middle market is an opportunity for growth

The Insurance Barometer reveals middle-income Americans (those with a household income of $50,000 - $149,999) represent the largest market opportunity for the industry. Four in 10 middle-income Americans, or 50 million adults, acknowledge they live with a life insurance coverage gap. This group also expressed a greater intent to buy life insurance (54%) than the general population.

Many take a ‘wild guess’ at cost

The number one reason consumers give for not purchasing life insurance — or more of it — is that it’s too expensive. Yet, since the first annual study was conducted in 2011, consumers have consistently overestimated the cost of life insurance. The most recent study shows about three-quarters (72%) of Americans overestimate the true cost of a basic term life insurance policy.

Younger Americans are likely to think it is three times its actual cost. There are few other products on the market today that consumers overestimate the cost by such a wide margin.

When asked how people come up with their life insurance cost estimate, more than half (54%) said it was based on “gut instinct” or a “wild guess.”

 

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on X @INNsusan.

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