Study: 37% of American Adults Skip Life Insurance
June 23, 2017 by InsuranceQuotes
AUSTIN, TEXAS (June 21, 2017)—A recent survey from insuranceQuotes.com finds that 37% of adults do not have life insurance. And while expense was the most commonly cited reason for not purchasing a policy—with 59% of those without a policy saying so—data revealed that respondents still wouldn’t do so, even if money weren’t an issue. But why?
“Many adults, particularly millennials, believe that since they’re currently healthy, they do not need life insurance. But rather than being viewed as an expense, life insurance should be viewed as an investment as well as a safeguard, for your spouse and children,” said Laura Adams, senior insurance analyst at insuranceQuotes.
There are many affordable policies out there, and unlike other insurance types, life insurance covers losses from an event that is inevitable, Adams added.
The study found that most non-policy holders:
Largely belong to the millennial generation: 65% in the 18-29 age bracket do not have life insurance policies compared with 29% in the 30-49 age bracket and 26% in the 50-64 bracket
- Are single: 23% of those with life insurance policies are single, while 75% are married
- Have less formal education: Only 26% of those without policies are college graduates
- Make less money: Of households with an annual income of $75,000 or more, 78% have life insurance policies; of those with an income $50,000 to $75,000, 74% have life insurance policies
Those who don’t have a policy say they’d spend extra income on the following before buying affordable life insurance: Purchase food/utilities (76%); Put money in savings (71%); Pay down debt such as car loan or student loan (67%); Donate to a charity (49%).
“The longer you wait to get life insurance, the more expensive policies become—so I always recommend to young adults that they do their best to get a jump start. When determining a policy, top factors to consider include your own personal health, loved ones, family history, retirement and estate taxes.
“Also worth considering, especially for consumers concerned about cost, are policies that convert life insurance into an income annuity, supplementing your retirement savings,” added Adams.
Excerpts from the report
Who’s not buying life insurance?
The survey, conducted in May 2017 of more than 1,000 U.S. adults 18 and older, found that those who do not currently have life insurance:
- Largely belong to the millennial generation: 65 percent in the 18-29 age bracket do not have life insurance policies compared with 29 percent in the 30-49 age bracket, and 26 percent in the 50-64 bracket who do not have life insurance policies.
- Are not married: 75 percent of those with life insurance policies are married compared with 23 percent who are single.
- Have less formal education: 26 percent of those without policies are college graduates and 34 percent have had some college education, while 72 percent of those with policies are college graduates and 65 percent have some college education.
- Make less money: Of households with an annual income of $75,000 or more, 78 percent have life insurance policies, and in households with an annual income between $50,000 and $75,000, 74 percent have life insurance policies.
Is life insurance an expense or investment?
Experts say that viewing life insurance as an expense is not uncommon, but it’s better to think of it as an investment.
“Unlike auto or home insurance, which may or may not ever be needed, life insurance covers losses against an event that is inevitable,” says Dave Bryant of Brystra Insurance Services.
The debate surrounding what is best — term or permanent life insurance — is still alive and well.
“If your goal is to make sure your family has enough to be taken care of financially if something does happen to you, then term life insurance is a lot cheaper than permanent life insurance policies,” says Richard Morris at Southwest Premier Insurance Agency in Arizona.
The full report—which includes additional data, tips and insights—is available here.
Methodology:
insuranceQuotes and Princeton Survey Research Associates International conducted an online survey of 1,001 U.S. adults aged 18 and older in May of 2017.
About insuranceQuotes:
insuranceQuotes gives consumers a free, easy way to shop and compare insurance quotes online for auto, home, health, life and business. Follow on Facebook, Twitter, and Google Plus.