Who’s Securing the Future? Today’s U.S. Life Insurance Purchasing Trends

Introduction

The landscape of financial security in the U.S. is constantly evolving. Numbers always tell a story, and the recent 2024 Insurance Barometer Study, published by LIMRA and Life Happens, a nonprofit organization dedicated to insurance education, offers a revealing snapshot of how Americans are approaching life insurance coverage. Who’s purchasing, and not purchasing, life insurance? And why? The study begins with the 42% of Americans who say they need life insurance or more of it (roughly 102 million adults) and further analyzes the financial need gap. The results tell a compelling story about financial preparedness in the U.S., spotlighting those who are most vulnerable without it, and how life insurance can transform financial uncertainty into vital peace of mind.

102 Million Life Insurance Stories

The LIMRA/Life Happens study surveyed nearly 5,000 adult consumers responsible for their household’s financial decisions and highlights three critical barriers:

• Cost perception. A staggering 56% believe life insurance is too expensive. Even more surprising, 72% of people are dramatically overestimating the actual cost of a basic term life insurance policy.
• Competing priorities. Many individuals are juggling multiple financial commitments, pushing life insurance to the bottom of their priority list.
• Complexity. The world of insurance feels overwhelming, with many unsure about the type and amount of coverage they truly need.

What is also apparent in the study are the generational, gender, and minority and economic group purchasing trends and differences when it comes to life insurance coverage.

A Generational Perspective on Financial Security

The study reveals fascinating generational differences. As younger generations approach significant life milestones like marriage and parenthood, the critical importance of life insurance becomes abundantly clear. These pivotal moments highlight the need for comprehensive financial protection.

For the second straight year in the study, Millennials expressed the highest level of financial concern, at 36%, which aligns with their life stage of family formation and career progression. Generation Z experienced a notable 8-percentage point increase in financial stress, largely driven by escalating living costs and emerging life responsibilities. And as the oldest Gen Z members approach 30, they’re confronting new financial realities like marriage and potential parenthood.

The Persistent Gender Gap

Perhaps the most striking result of the study is the persistent gender gap in life insurance. This gap traditionally stems from factors like lower female earnings, the undervaluation of women’s unpaid labor, and potentially a lack of financial literacy, leading to women having less financial coverage.

The gender gap in life insurance ownership has also widened, with women less likely than men to have life insurance (46% versus 57%). The 11-percentage point gap is the largest difference in the 14-year history of the study. However, women are eager to take action, with 45 percent acknowledging a gap in their coverage and 36 percent saying they plan to purchase life insurance in 2024, with nearly half of younger women sharing those plans.

Despite this, roadblocks remain. Half of the women surveyed say the cost of life insurance is a barrier, and just 21% say they’re knowledgeable about the products.

Who Needs Coverage Most?

Certain demographic groups demonstrate a heightened awareness of life insurance needs. Black Americans, Hispanic Americans, and households earning under $50,000 annually show a keen understanding of the importance of financial protection. Younger generations, particularly those aged 18-59, emerge as a critical segment in need of comprehensive coverage.

The Final Word

The 2024 LIMRA/Life Happens study makes it clear that life insurance is not a luxury, but a necessity. With 42% of adults recognizing their financial coverage needs, insurers have a significant opportunity to bridge protection gaps, challenge misconceptions, and take decisive action to attract the next generation of customers and policyholders. Ultimately, the study is more than just statistics; it’s about protection, peace of mind, and the need for Americans to reassess their financial safety nets, with insurance transforming uncertainty into a secure and stable future.