WINDSOR, Conn. and Washington, D.C., April 24, 2023—While two-thirds of Americans report their lives have largely returned to normal following the COVID-19 pandemic, the 2023 Insurance Barometer Study shows a record-high proportion of consumers (39%) who say they intend to purchase life insurance coverage within the next year. The intent to buy is even higher among Gen Z adults (44%) and millennials (50%).
This year’s study, conducted jointly by nonprofit industry trade associations LIMRA and Life Happens, shows younger generations are less likely to have coverage and more likely to live with a life insurance coverage gap. Overall, 52% of American adults report owning life insurance, and 41% of adults — both insured and uninsured — say they don’t have sufficient life insurance coverage. In comparison, just 40% of Gen Z adults and 48% of millennials say they own life insurance and nearly half say they either need to get coverage or increase their life insurance protection (49% and 47%, respectively), representing 53 million adults. For more details, visit this page: Life Insurance Needs of Younger Adults.
“Younger generations experienced a life-altering event just as they were starting their careers, getting married and having children,” said Alison Salka, Ph.D., senior vice president, head of LIMRA research. “The realization of how precarious life can be may have made them more aware of the need to protect their loved ones.”
Single mothers and younger parents acknowledge higher need for life insurance
According to the U.S. Census Bureau, the number of single-mother households in the U.S. has increased by 40% since 1980. This year’s study looked at the growing single mothers market and found that less than half (41%) of single mothers say they have life insurance, 11 points below the general population rate. Because single mothers are often the sole source of financial support for their children, and typically have a heightened sense of financial concern, it is not surprising that their need for life insurance is higher. Fifty-nine percent of single mothers say they need life insurance coverage or more of it, representing five million adults.
Upon looking at parents in general, the study found parents of minor children were more likely than the general population to own life insurance (59% versus 52%), and they were also more likely to acknowledge they didn’t have enough coverage (47% versus 41%). Among younger parents, the need gap was greater. On average, 56% of Gen Z and millennial parents reported not having enough coverage.
Lack of knowledge about life insurance appears to be the greatest obstacle preventing younger parents from getting coverage. Less than 1 in 3 Gen Z and millennial parents feel very knowledgeable about life insurance. Moreover, 40% of Gen Z parents and 29% of millennial parents say they haven’t purchased coverage because they don’t know how much coverage they need or what type to buy.
“Educating young adults is key because no one is going to buy what they don’t understand. Year after year, people significantly overestimate the cost of life insurance, while citing expense as the top reason for not getting coverage,” said Maggie Leyes, chief creative officer of the educational nonprofit Life Happens, and coauthor of the study. “It’s also important how we engage and educate them. Younger adults are increasingly looking to buy life insurance online and are more likely to use social media platforms ― particularly Instagram, Twitter and Tik Tok ― to educate themselves. Our goal should always be to meet them where they are.”
The impact of life insurance ownership is remarkable. While 60% of younger parents say they would be financially secure if a primary wage earner were to pass away, owning life insurance makes a significant difference: 71% percent of insured parents would feel financially secure versus 48% of uninsured parents, a 23-point difference.