Insights & Education

Helping Americans better protect their families with life insurance

Life insurance is a cornerstone for a secure financial plan. But do Americans understand how life insurance works—and do they have life insurance coverage in place?

New research from Corebridge Financial provides valuable insights on Americans’ general knowledge about life insurance and their current levels of coverage—highlighting the need for more education.

Americans have a pretty good understanding of life insurance basics

The majority of those surveyed were able to identify correct responses to questions about life insurance-related concepts.

80% recognize that the cheapest time to buy life insurance is when you are young and healthy.
76% know that debts you leave behind when you die can eat up assets you hoped to leave to your heirs.
72% recognize that life insurance can provide benefits while you’re living.
72% also understand that some term life policies can be converted to permanent life insurance before the end of the policy.
71% know that you can use life insurance to leave a donation to a charity.

In need of education in a few important areas

While Americans scored well on the basics, there are a few areas where they seem to be less knowledgeable, including cost.

Only about one 1-in-10 (11%) could correctly identify the approximate monthly cost for a healthy 30-year-old to get a 20-year $250,000 term life insurance policy. (Correct answer was $15). Gen Xers and people with income of greater than $100,000 were most likely to answer the question correctly.
6-in-10 (60%) incorrectly selected that term life insurance allows you to build a cash value; it does not.
Just over 6-in-10 (61%) incorrectly selected that for life insurance, the payment amount at death is fixed at the time of purchase and does not change. (Note: While this is true for term life insurance, it is not true for permanent insurance where the payment can change.)

In need of life insurance coverage

A whopping 50% of Americans say they do not have a life insurance policy. By gender, women are more likely to say they do not have a life insurance policy than men—53% vs. 45%. Among those with a policy, 23% say they purchased it on their own and 16% say they have a policy through work.

Those age 65+ are most likely to have a purchased a policy on their own (37%), but interestingly, they are also the most likely to explicitly state they do not have a policy (52%).

Not surprisingly, as income increases, so does current reported ownership of a life insurance policy. Only about 3-in-10 people (31%) with annual income of less than $50,000 report owning a policy. This number jumps to 3-in-4 (75%) for those with annual income greater than $100,000.

Top reasons selected for not yet purchasing life insurance

It costs too much: 45%
I have other more important financial obligations: 22%
I don’t have any dependents/I don’t like to think about death: 20%
I can always buy it later: 15%
I’m healthy/It’s too complex: 11%
I already have enough money to provide for my loved ones: 7%
The process takes too long/I had a bad experience with a life insurance company/I don’t like the medical aspect (blood work, etc.): 4%

Responses from those who don’t currently have life insurance.

Many may be underestimating the value and importance of living benefits^*

When asked to consider which life insurance benefits are important for their overall financial plan, nearly 6-in-10 (58%) recognize the core value of life insurance for leaving money to loved ones so they can maintain their lifestyle.

However, it appears many may be underestimating the role of living benefits that certain types of life insurance offer. Only 35% selected these two living benefits as valuable:

Cash value benefit that can grow tax-free and be borrowed against
Financial support when facing a critical medical diagnosis

And just 34% selected covering nursing home or at-home care if they develop cognitive decline or become permanently disabled. These findings highlight the need for greater education on the full value and variety of benefits that certain types of life insurance can provide today.

*Terms and limitations apply to life insurance living benefits. Living benefit features and riders may vary from policy to policy and insurer to insurer.

Expedited underwriting can be a key incentive to get coverage

15% of Americans say they are currently in the market to purchase a life insurance policy – and a quick underwriting process could improve that number, with 39% saying a 24-hour turnaround is an incentive to purchase a policy.

Importantly, 21% report uncertainty about needing coverage, which suggests education and guidance from a life insurance professional could make a difference.

Those ages 18-44 are most likely to be in the market for life insurance (18%), followed closely by ages 45-64 (15%). The greatest level of uncertainty is among ages 35-44 (25%).

Motivators for those seeking life insurance coverage

Peace of mind: 51%
Cover burial and other final expenses: 44%
Pay off debt: 31%
Transfer wealth/leave inheritance: 30%
Build cash value I can use in my lifetime: 24%
Replace lost income for beneficiaries: 21%
Cover children’s college education/cover estate taxes: 18%
Supplement retirement income: 13%
Make a charitable gift: 7%

Responses from those currently in the market for life insurance.

Now is the time for action

With so many Americans still uninsured or possibly underinsured when it comes to life insurance coverage, the time for greater education and action is now.

At Corebridge, we’re committed to helping Americans better protect their families with life insurance for a more secure and worry-free financial future.

Learn more about life insurance solutions from Corebridge Financial or talk to a life insurance professional today.

We believe great things can happen when people take action. Action is everything.

Download survey findings

The Corebridge Financial Life Insurance Insights & Awareness Survey was conducted online June 18-20, 2024, by Morning Consult among a national sample of 2,204 U.S. adults.