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Securian Financial


July 2021 Edition

More Americans are interested in life insurance, after the past year of living through a global pandemic. According to LIMRA’s 2021 Insurance Barometer Study, 31 percent of consumers report they’re more likely to buy life insurance because of COVID-19.1

Life-altering events such as marriages and births have always affected attitudes toward life insurance. Now, it appears pandemics also influence demand. According to LIMRA’s study, life insurance interest is highest among males, millennials, Blacks and Hispanics, higher-income households and couples.1

The data also revealed that respondents who personally contracted the virus were 42 percent more likely to buy life insurance. And one-third of people who hadn’t tested positive – but knew someone who did – are more likely to buy a policy.1

Demand for life insurance at all-time high

The LIMRA survey also revealed the need for life insurance is at an all-time high, with 70 percent of Americans reporting they need the coverage. Currently, however, only about 52 percent of Americans own life insurance, revealing about a 20 percent gap and the lowest level of ownership since the decline began in 2017.1

Plus, when comparing life insurance purchasing behaviors of three different generations – millennials, baby boomers and Generation X – millennials are the most motivated (45 percent) to buy insurance.2 However, millennials are also the most likely to overestimate insurance costs. Forty-four percent estimated the price of a 20-year term life insurance policy for an average 30-year-old would be over $1,000 annually. The average actual cost: $165.3

For benefits managers, these life insurance misconceptions can be addressed by more frequent communications with employees.

Coverage trends during the pandemic

LIMRA discovered the pandemic had a clear impact on both consumer behaviors and mindsets. Thirteen percent of life insurance owners indicated they purchased coverage for the first time in 2020, at the pandemic’s apex.1

Half of the new life insurance owners bought individual policies, and half were employer-provided. Most first-time buyers were males, Blacks, higher-income households or couples.1 After basic life insurance, annuities rank second for ownership, followed by disability insurance, then long-term care.1

Not surprisingly, one of the factors holding consumers back from purchasing life insurance was a lack of basic knowledge. In fact, less than a third of surveyed consumers said they were “very” or “extremely” knowledgeable about life insurance.2

This is another reason why employers should spend more time educating employees about life insurance and its benefits – and offer tools to determine how much coverage to buy.2 Here are some specific topics HR managers can address with employees:

  • Adequate insurance coverage is critical for their financial wellness2
  • Help them understand the different types of life insurance2
  • Explain they may qualify – even though they think they might not2
  • Clearly outline the application process2

And for both employers and life insurance providers, demystifying the false perceptions of the high cost of coverage is key to overcoming purchase barriers (especially for millennials) holding back from buying.2

1. “2021 Insurance Barometer Study,” LIMRA, ©2021 LL Global, Inc. and Life Happens.

2. Egan, John; Danise, Amy. “Survey Shows Plans to Buy Life Insurance But False Perceptions of High Cost,” Forbes, April 13, 2021.

3. “2021 Insurance Barometer Study Reveals Common Misconceptions That Prevent Americans from Getting Life Insurance They Need,” LIMRA press release, April 12, 2021.

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