Life insurance is an important financial tool that provides financial protection to one's family in the event of their death. However, a surprising number of people remain uninsured or underinsured, leaving their loved ones vulnerable in the face of unforeseen circumstances. As of 2021, around 52% of Americans have life insurance, while nearly a quarter of Americans, or 23% to be precise, are uninsured. This means that millions of families are at risk of financial distress when their primary breadwinners pass away.
The main reason cited for not having life insurance is its perceived cost. Many people overestimate how expensive life insurance is, believing it to be three to six times more costly than it actually is. This misconception, coupled with other financial priorities and uncertainty about the necessary coverage amount, creates a significant barrier for individuals and families who could benefit from life insurance.
Furthermore, there is a notable generational gap in life insurance ownership, with Baby Boomers having the highest rate of ownership at 57% and Gen Z, the lowest at 36%. This disparity highlights a need for better financial education and planning among younger generations, who may underestimate the importance of life insurance in providing financial security for their loved ones.
Characteristics | Values |
---|---|
Percentage of Americans with life insurance | 52% |
Percentage of Americans intending to buy life insurance in the next year | 39% |
Percentage of Gen Z intending to buy life insurance in the next year | 44% |
Percentage of Millennials intending to buy life insurance in the next year | 50% |
Percentage of Americans without life insurance | 48% |
Percentage of Americans who believe life insurance is too expensive | 42% |
Percentage of Americans who overestimate the cost of life insurance | 72% |
Percentage of Americans who are uninsured or underinsured | 41% |
Percentage of Americans who need to obtain life insurance or increase their coverage | 42% |
Percentage of women with life insurance | 49% |
Percentage of men with life insurance | 55% |
Percentage of parents with life insurance | 59% |
What You'll Learn
48% of Americans don't have life insurance
Life insurance is an important financial tool that provides financial protection to those who rely on the insured for financial support. However, a significant portion of Americans, approximately 48%, do not have life insurance. This lack of coverage leaves many individuals and families vulnerable to financial hardship in the event of unexpected death.
Several factors contribute to the decision not to purchase life insurance. One of the main reasons is the perception of high costs. Many Americans believe that life insurance is too expensive and overestimate the actual cost. This misconception has deterred people from obtaining the necessary coverage, with 42% of consumers citing cost as the primary reason for not purchasing life insurance.
Another factor influencing the decision not to buy life insurance is a lack of understanding about the product. Some individuals may not know how much coverage they need or what type of policy would best suit their needs. This knowledge gap, coupled with the perceived high costs, leads to indecision and inaction.
Additionally, life insurance ownership varies across different demographic groups. For example, women are less likely to have life insurance than men, with a consistent gap in ownership rates over the years. Hispanic Americans also have a lower rate of life insurance ownership compared to other racial and ethnic groups.
The need for life insurance is particularly acute among certain groups. For instance, parents of minor children are more likely to have life insurance than the general population, recognizing the importance of financial security for their families. Similarly, single mothers, who are often the sole providers for their children, have a higher need for life insurance, yet only 41% of them have adequate coverage.
The lack of life insurance coverage among a significant portion of Americans underscores the need for education and outreach. By addressing misconceptions about cost, providing clear information about the benefits of life insurance, and tailoring solutions to meet the diverse needs of different demographic groups, the life insurance industry can help close the coverage gap and ensure that more individuals and families have the financial protection they need.
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30% of Americans would suffer financially within a month of losing a wage earner
Life insurance is a valuable financial tool that provides financial protection to one's family and loved ones in the event of an unexpected death. However, a significant number of Americans do not have adequate coverage, with 48% of Americans lacking any form of life insurance. This translates to over 100 million Americans who are either uninsured or underinsured.
Among those with life insurance, there is a concern about insufficient coverage. This is particularly true for parents of minor children, who, despite having a higher likelihood of owning life insurance (59%) compared to the general population (52%), also acknowledge that they do not have enough coverage (47% vs 41%).
The financial consequences of inadequate life insurance coverage can be severe. According to one source, 30% of Americans would suffer financially within just one month of losing a wage earner. This vulnerability is not limited to a specific demographic but spans generations, with 40% of Gen Zers and 48% of Millennials also lacking life insurance coverage.
The gap between those who have life insurance and those who need it is significant and underscores the need for education about the value and potential affordability of life insurance. Misconceptions about the cost of life insurance are prevalent, with many Americans overestimating the price by up to three times the actual rate. This cost concern is the primary reason why 30% of those without coverage have not purchased insurance.
Other barriers to obtaining life insurance include a lack of understanding about the necessary coverage amount and competing financial priorities. Addressing these barriers through education and improved access to information can help close the gap and ensure more individuals and families achieve financial security and peace of mind.
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42% of women own life insurance, compared to 55% of men
While 52% of Americans have a life insurance policy, there is a gender gap in coverage, with 42% of women owning life insurance compared to 55% of men. This gap has persisted for over a decade, with women consistently trailing 11 percentage points behind men in life insurance ownership rates.
Women's life insurance ownership has declined year-on-year for five years, with 36% of women who lost their life insurance coverage in 2020 citing unexpected job loss as the reason. In 2021, survey data indicated that around a third of American women planned to buy life insurance within the next year, compared to 42% of men.
The gender gap in life insurance ownership may be attributed to several factors, including income gaps and a lack of awareness of the financial value of their lives. Women continue to earn less than men overall, which may result in lower life insurance coverage as many people base their coverage on a multiplier of their income. Additionally, women are more likely to worry about familial well-being but are less likely to purchase life insurance than men.
Despite the gap in ownership rates, life insurance is generally cheaper for women than men. This is because women tend to live longer than men and are more likely to outlive the term of their policy. As a result, women can often obtain coverage at a lower cost.
To address the gender disparity in life insurance ownership, it is essential to recognise the financial value of women's contributions to their families and ensure they have equal access to financial protection.
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39% of Gen Z and 50% of millennials plan to buy life insurance in the next year
Life insurance is a valuable part of financial planning, yet a significant number of people do not have coverage. According to the 2023 Insurance Barometer Study, 39% of Gen Z and 50% of millennials plan to buy life insurance in the next year. This trend is likely driven by the financial insecurity caused by the pandemic, which has made younger generations more aware of the need to protect their loved ones financially.
The study also revealed that only 40% of Gen Z adults and 48% of millennials currently own life insurance. This is despite the fact that half of Gen Z and 47% of millennials feel they need to get life insurance or increase their coverage. The main barrier to purchasing life insurance for these groups is a lack of knowledge about how much coverage they need and what type to buy. Other factors include the perceived high cost of life insurance and the belief that their employer-provided coverage is sufficient.
It is important to educate young adults about the importance of life insurance and how to purchase it. Many people overestimate the cost of life insurance, with more than half of Gen Z adults and 38% of millennials thinking it would cost $1,000 or more per year. In reality, a healthy 30-year-old could get a $250,000 20-year level term policy for just $13 to $200 per month.
The shift towards online research and purchasing has also made it easier for younger generations to access life insurance. In 2023, 32% of people said they preferred to research and buy life insurance online, compared to 29% who wanted to do so in person. This trend is particularly prominent among younger generations, who are comfortable using social media for financial education and prefer the convenience, ability to research, and speed of online platforms.
Overall, the high interest in life insurance among Gen Z and millennials presents an opportunity for the industry to educate and engage these groups, helping them to protect their financial future and that of their loved ones.
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72% of Gen Z are likely to own permanent coverage
Life insurance is a valuable financial planning tool that provides financial protection to the insured's loved ones. However, a significant number of Americans do not have life insurance coverage. As of 2025, 48% of Americans, or about 100 million people, do not have life insurance. This figure has remained relatively stable over the years, with 52% of Americans reporting that they have a life insurance policy in 2025, a slight increase from 49% in 2024.
Among those without life insurance, 30% of Americans recognize the need for it but have not obtained it due to various barriers such as perceived high costs, other financial priorities, or uncertainty about the necessary coverage amount. This gap between the insured and uninsured highlights the insurance industry's challenge of addressing misconceptions about cost and educating consumers about the value and potential affordability of life insurance.
When it comes to generational trends, Baby Boomers have the highest rate of life insurance ownership. Gen Z, on the other hand, shows a growing interest in life insurance, with 44% intending to purchase it within the next year. 72% of Gen Z Americans are likely to own permanent coverage, making them the most likely group among the generations. This interest in life insurance could be attributed to Gen Z's desire to start or grow their families, with 63.6% planning to do so.
Additionally, Gen Z's approach to homeownership and insurance differs from previous generations. They are more fiscally conservative and cautious about spending due to inflation and debt. When it comes to purchasing homes, they prefer more affordable cities and towns rather than expensive metropolitan areas. As a generation that is well-aware of climate change, Gen Z may also face increasing homeowners insurance costs. To cater to Gen Z, insurers should offer accessible products with transparent pricing and customizable coverage options.
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Frequently asked questions
According to a 2023 study, 48% of Americans don't have life insurance. This number has decreased from 2011 when 63% of Americans had life insurance.
The number one reason consumers give for not purchasing life insurance is that it's too expensive. However, this is a common misconception, as most people overestimate the cost of a basic term life insurance policy.
Yes, there is a gender gap in life insurance ownership. Women are less likely to have life insurance than men, with an 11-point gap in ownership rates.
The percentage of life insurance ownership tends to increase with age. Baby Boomers have the highest rate of life insurance ownership, while Gen Z has the lowest.
According to a 2023 study, the most common reasons Americans gave for buying life insurance were burial/final expenses (82%), income replacement (60%), supplementing retirement income (66%), and paying off a mortgage (50%).