Life Insurance Helps People Feel Safe: Survey

What You Need to Know

Only 47% of financial decision-makers without life insurance said they would be financially secure if the primary wage-earner died unexpectedly.
About 78% of the financial decision-makers who have both individual and employment-based life insurance said they would be financially secure if a primary wage-earner died unexpectedly.
Consumers who said they feel knowledgeable about life insurance were much more likely to say they had coverage.

Americans are nervous this year — and life insurance could be one part of the answer.

LIMRA and Life Happens are using new data, from their 12th annual Insurance Barometer Study, to make the case that owning life insurance increases consumer confidence, and that improved marketing will increase consumer life insurance ownership.

The groups asked U.S. consumers whether they would be financially secure if their family’s primary wage-earner were to die unexpectedly.

Only 47% of the survey participants without any life insurance said they would be financially secure.

The share predicting they would be financially secure increased to 68% for survey participants with some kind of life insurance, and to 78% for participants with both individual life insurance and employment-related life insurance.

LIMRA and Life Happens also found a strong correlation between life insurance awareness and life ownership.

Just 17% of the survey participants who said they had little knowledge about life insurance reported having life insurance.

About 62% of the participants who described themselves as being very or extremely knowledgeable about life insurance said they had it.

What It Means

Financial and retirement advisors can help clients use permanent life insurance to accomplish many different complicated planning objectives, including efforts to minimize the impact of required minimum distributions and federal income taxes on the retirement plans of the affluent.

But this is also a time when COVID-19 and other events have increased stress among consumers.

The approach LIMRA and Life Happens is taking might be a sign that even financial services survey designers are now thinking of life insurance first as chicken soup for weary souls.

Faisa Stafford, Life Happens’ CEO, said in a comment, included in a survey results announcement, that she believes the impact of the COVID-19 is still in many consumers’ thoughts.

“Life insurance is the foundation of any strong financial plan, and our results show it provides people with a sense of security that many are looking for, especially after the last two years,” Stafford said.

The Nuts and Bolts

LIMRA is a Windsor, Connecticut-based nonprofit group that helps more than 700 life insurance and financial services companies with market research services and other services.

Life Happens is an Arlington, Virginia-based nonprofit group that runs insurance consumer education campaigns.

LIMRA and Life Happens unveiled some results from the 2022 Insurance Barometer Study survey Monday, in Tampa, Florida, at the 2022 Life Insurance Conference.

The survey team fielded the survey questionnaire online in January. Organizers received answers from 8,517 U.S. adults who are financial decision-makers in their households.

LIMRA is one of the sponsors of the 2022 Life Insurance Conference, and a LIMRA sister organization, LOMA, is another sponsor. The other sponsors are the Society of Actuaries and the American Council of Life Insurers.

One of the goals of conference organizers is to promote increased access to and ownership of life insurance.

Maggie Leyes, Life Happens’ chief creative officer, and Steve Wood, a LIMRA senior analyst, talked in a conference session Monday about how life insurance issuers and distributors can use the new Barometer survey results to tailor their marketing, and to improve product development and distribution decisions.

Other conference speakers plan to address topics such as COVID-19 mortality, advances in insurance underwriting and administration technology, and new climate investment risk disclosure efforts.

The ‘Great Reset’

LIMRA and conference organizers are calling for a “great reset” in life insurance marketing and administration efforts.

“The pandemic represents a rare but narrow window of opportunity to reflect, reimagine and reset our industry,” the organizers say.

The organizers say that life insurers have shown consumers that they have been able to meet their benefits obligations throughout the COVID-19 pandemic.

“We should be able to capitalize on the renewed interest resulting from the pandemic and keep the momentum going,” the organizers say.