Life insurance policyholders confused about living/death benefits

CHESTERFIELD, MO (September 8, 2025) — iCover Direct announced results of a nationwide consumer survey revealing a significant lack of understanding among life insurance policyholders about their benefits. The survey, conducted in coordination with September as Life Insurance Awareness Month, highlighted a particular knowledge gap regarding the difference between death benefits and living benefits, underscoring a need for greater consumer education and simpler, more transparent policies.

The iCover Direct survey found that a staggering 40.5% of policyholders are unaware of additional benefits included in their life insurance policy beyond the standard death benefit. This finding points to a critical issue: many consumers may be missing out on valuable financial resources they are entitled to while they are still alive.

"Our mission at iCover Direct is to make life insurance accessible, understandable, and beneficial to everyone," said Hari Srinivasan, Founder and CEO of iCover Direct. "These survey results are a clear call to action for the entire industry. When nearly half of all policyholders don't know about their full range of benefits, we know there's a fundamental breakdown in how consumers understand the full potential of life insurance."

Death benefits vs. living benefits: A crucial distinction

The survey data on benefits usage further illustrates the confusion. While 21% of respondents reported using a death benefit, a relatively small number had utilized living benefits. Only 17% had used a cash value withdrawal, and a mere 3.5% had accessed an accelerated death benefit. This disparity suggests that many policyholders are unaware that they can tap into their policy's value under certain circumstances before they pass away.

• Death Benefitsare the lump sum of money paid out to beneficiaries after the policyholder's death. This is the most widely understood aspect of life insurance and is intended to provide financial support for loved ones to cover expenses like mortgages, funeral costs, and lost income.
• Living Benefits, also known as accelerated benefits or riders, allow policyholders to access a portion of their death benefit while they are still living. These benefits are typically triggered by specific life events, such as being diagnosed with a critical, chronic, or terminal illness. They can be used to cover medical expenses, long-term care, or other financial needs during a difficult time.

A call for simplicity and clarity

The survey results strongly indicate that consumers are looking for a more straightforward insurance experience. When asked about desired industry improvements, the top two responses were "simpler policies" and "faster claims," both at 31.7%. This was followed by "better service" (16.1%) and "lower premiums" (15.6%).

This desire for clarity is further reinforced by the finding that only 16.7% of respondents found it "very easy" to understand their policy's terms. A third (33%) found it "somewhat easy," while 32% found it "neutral to difficult." This lack of clarity is a significant barrier to consumer trust and engagement.

Affordability perception: A positive note

Despite the confusion surrounding policy terms, the survey revealed that many consumers perceive life insurance as affordable. Nearly half (49.7%) of respondents found it "affordable" or "very affordable," compared to only 17.3% who considered it "slightly" or "very expensive." This data suggests that the challenge isn't the cost of insurance, but rather the complexity of understanding what a policy provides.

For more information, visit www.icoverdirect.com.