The rise in crowdfunding: A symptom of the coverage gap

In times of desperation and distress, families are turning to crowdfunding platforms to cover funeral costs and immediate expenses after the loss of a loved one. GoFundMe, one of the platforms known for these purposes, experienced a 20% increase in crowdfunding for everyday expenses in 2025.

Many insurance professionals have seen or heard of families using crowdfunding to help cover funeral costs or other immediate financial needs after a loss. These campaigns can generate meaningful support in a short period, but this signals that many households are trying to address a financial protection gap reactively.

For insurance professionals, this trend is worth paying attention to. It reveals how families respond in moments of financial vulnerability and why proactive planning remains so important. Life insurance can provide a more structured and dependable source of support, helping families prepare for immediate needs while maintaining greater financial stability after a loss.

A visible symptom of a deeper gap

The growing reliance on crowdfunding reflects a combination of factors that continue to shape consumer behavior:

» There is still a widespread perception that life insurance is too expensive. Even when individuals recognize its value, they may assume it’s out of reach.

» Many people simply avoid planning for the inevitable. Conversations around death and long-term financial protection are uncomfortable. That discomfort leads to inaction.

» With more product options available than ever, some feel overwhelmed by choice. Instead, they delay or attempt to navigate the process on their own.

» Trust remains a barrier. Insurance isn’t always viewed as a highly trusted industry. That skepticism can make it harder for people to take the next step.

Together, these factors create an environment where financial decisions are made reactively rather than proactively. 

Why reactive decisions persist

For many households, financial trade-offs are real and immediate. In tighter economic conditions, decisions, which framed as this or that, not this and that. That can push long-term financial planning further down the priority list.

At the same time, the lack of a trusted, accessible resource can leave individuals unsure of where to turn. Without guidance, even those who are ready to build their plans may delay decisions, which ultimately may leave them unprepared.

In this context, crowdfunding is simply a fallback plan. It may help cover immediate expenses, but the same amount of money raised after a loss could often have gone much further if used proactively to secure life insurance coverage. For example, a few thousand dollars in annual premium may support a policy with a much higher face amount, depending on the individual’s age, health, product type and coverage needs.

What this means for life insurance advisors

For life insurance brokers, this environment presents an opportunity to help clients move from uncertainty to action. LIMRA research shows many younger adults recognize they need life insurance — or more of it — but still believe coverage is out of reach. In fact, according to LIMRA, in 2025 almost half of millennials reported not purchasing life insurance because they believed it was too costly — and when asked to guess a premium payment for a $250,000 policy, many greatly overestimated the cost.

That misconception can prevent people from making life insurance a priority even when affordable options may be available. Producers can help close that gap by bringing clarity to the conversation and showing clients how coverage can fit their needs and budgets. 

In addition, while many turn to digital tools for researching life insurance, LIMRA reported 40% of consumers would still want to work with an advisor early in the process — reinforcing the value of the broker’s role.

Over the years, I’ve spoken with many successful advisors about what helps clients feel more comfortable taking the first step toward protection and building trust. A few common themes consistently stand out:

» Speak in plain language. Avoid industry jargon and explain options in a way that’s easy to understand. Clarity builds confidence and helps clients feel more comfortable making decisions.

» Lead with connection. Building trust starts with demonstrating that you understand a client’s situation and priorities. People are more likely to act when they feel heard.

» Right-size the recommendation. Many clients may want comprehensive coverage but feel constrained by cost. Starting with a smaller, more affordable policy can help them take that first step with the understanding that coverage can grow over time.

» Be present and responsive. Whether in person or through timely follow-up, accessibility reinforces trust. Clients are more likely to move forward when they know support is readily available.

» Position yourself as a partner: The most effective producers act as counselors, guiding clients through decisions instead of pushing products.

Employer-sponsored benefits can also play an important role by providing a more accessible entry point. Life insurance offered through the workplace makes it easier for employees to access and understand their options without having to navigate the process on their own.

Although these one-on-one interactions matter, they’re only part of the solution. Building lasting trust requires consistent education across multiple touchpoints.

Building trust through education and consistency

Closing the financial preparedness gap depends on sustained education and awareness across multiple channels.

When people encounter consistent messaging from financial advisors, employers, digital platforms and third-party sources, it reinforces credibility and helps normalize planning behaviors. Over time, that consistency can help shift perceptions and reduce hesitation.

Equally important is demonstrating real outcomes. Sharing examples of how coverage supports families in times of need can make the value more tangible and relatable. People are more likely to act when they can see how a decision applies to their own lives.

A more proactive approach

Crowdfunding will continue to serve a role in helping families navigate immediate needs. However, it shouldn’t be the primary safety net.

Help more individuals take proactive steps before a crisis occurs. By building trust and meeting clients where they are, you can play a central role in turning awareness into action and in helping families build more reliable financial protection over time.

Grant D. Ward Sr. is president and CEO of Boston Mutual Life Insurance. Contact him at [email protected].