Download - The Life Insurance Need Gap - LIMRA
Insurance
Markets
The Life Insurance Need Gap
Source: 2021 Insurance Barometer
2
Welcome – Sean O’Donnell, Senior Vice President, Member Relations, LL Global
Insurance Barometer Overview – Faisa Stafford, President & CEO, Life Happens
• COVID
• Financial concerns
• Life insurance ownership profiles
• Life Insurance Need-Gaps: owners & non-owners
• Reasons for Not Owning (More) Life Insurance
Consumer Mindsets – Jim Scanlon, AVP, Insurance Research, LL Global
Outline
Source: 2021 Insurance Barometer
3
• The Insurance Barometer is an annual study
since 2011, which tracks the perceptions,
attitudes, and behaviors of adult consumers in
the United States.
• LIMRA and Life Happens engage an online panel
to survey adult consumers who are financial
decision-makers in their households.
• The study objectives are to measure financial
concern among American consumers and relate
these findings to financial behaviors, with a
particular focus on life insurance.
Insurance Barometer Overview
Source: 2021 Insurance Barometer
2021 INSURANCE
4
31% of consumers are more likely to buy life insurance
due to COVID
The impact is higher among:
• Millennials [45%]
• Household incomes of $150K or more [42%]
• Blacks [38%] & Hispanics [37%]
• Couples [35%]
• Males [33%]
Consumer Mindsets – Impact of COVID on Purchase Intent
Source: 2021 Insurance Barometer
5
Health Coverage
Disability
Long-term care
Medical
Life Insurance
Dependent financial security
Final expenses
Leaving an inheritance
Living Expenses
Debt / loans
Job / income security
Monthly bills
Mortgage / rent
Savings Goals
Emergency fund
Funding an education
Investment / losses
Retirement
• Consumers say
competing priorities
are a reason for not
owning (more) life
insurance.
• Tracking concern
across categories
shows the industry
where life insurance
ranks.
Consumer Mindsets - Financial Concern Trends
Source: 2021 Insurance Barometer
6
Relative concern
for life insurance
has increased, it
moved into 3rd
place in 2020.
Financial Concern Hierarchy – 2011 to 2021
Source: 2021 Insurance Barometer
0.25
0.45
0.65
0.85
1.05
1.25
1.45
1.65
2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1
FIN
AN
CIA
L C
ON
CE
RN
IN
DE
X
Living Expenses Health Expenses Saving Goals Life Insurance
7
63%
59%
62%
57% 57%
60% 59% 59%57%
54%52%
36% 36%34%
32% 31%34%
29%32%
29%
25% 25%
41%
36%
41%
38% 38%
41% 41%39% 39% 39% 39%
2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1
Life insurance (Any) Group/Employer-sponsored life Individual life
Life Insurance Ownership by Type 2011 to 2021
Source: 2021 Insurance Barometer
Life
Insurance
Ownership
Market Size
(million of
adults)
Owners 52% 134
Non-owners 48% 124
Total 100% 258
Source: U.S. Census Bureau, Population Division, 2020 Demographic
Analysis (December 2020 release)
Life insurance
ownership volume
equals 134 million
adults.
8
58%
47%
55% 55%
49%
39%
Male Female Baby Boomers Gen X Millennial Gen Z
Demographic
profiling
identifies gaps
within market
segments.
Insurance Ownership Volume & Profiles
Source: 2021 Insurance Barometer
Life Insurance Ownership by Gender & Generation
National
average
= 52%
Gender Generation
9
Life Insurance Ownership Profiles - 2021
Source: 2021 Insurance Barometer
52% 51%
56%
33%
53%
63%65%
60%
47%
33%
White Hispanic AfricanAmer.
<$50K $50K-$99.9K
$100-$149.9K
$150K+ Couples DWS Single
National
average
= 52%
Race/Ethnicity Household Income Marital Status
10
70%
65% 65%63%
67%69% 70%
68%66%
70% 70%
63%
59%
62%
57% 57%
60% 59% 59%57%
54%52%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Need Life Insurance Have Life Insurance
• The gap between
“I need” and “I
“have” equals 18-
points, or 46
million
consumers
• This understates
unmet need in the
market.
Life Insurance Ownership Gap - 2011 to 2021
Source: 2021 Insurance Barometer
Life Insurance
Ownership Gap =
18-points
11
Life Insurance Need – Owners & Non-Owners
Source: 2021 Insurance Barometer
Non-owners = 48%
“Need” life insurance =
59%
Un-insured Need-Gap =
29% of sample
73 million
Owners = 52%
“Need more”coverage =
22%
Under-insured Need-Gap =
11% of sample
29 million
In all, 40% of
Americans live
with a life
insurance
need-gap; 102
million adult
consumers.
12
Life Insurance Need by Gender
Source: 2021 Insurance Barometer
24%
32%
12%
11%
64%
57%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
MALE
FEMALE
Non-Owners WhoNeed Coverage
Owners Who NeedMore Coverage
No Perceived Needfor Coverage
13
Life Insurance Need by Household Income
Source: 2021 Insurance Barometer
17%
18%
28%
45%
9%
15%
12%
9%
73%
67%
60%
46%
$150K OR MORE
$100K TO $149.9K
$50K TO $99.9K
UNDER $50K
Non-Owners WhoNeed Coverage
Owners Who NeedMore Coverage
No Perceived Needfor Coverage
14
Life Insurance Need by Race/Ethnicity
Source: 2021 Insurance Barometer
27%
33%
32%
20%
11%
14%
14%
7%
62%
53%
55%
73%
WHITE
HISPANIC
BLACK
ASIAN
Non-Owners WhoNeed Coverage
Owners Who NeedMore Coverage
No Perceived Needfor Coverage
15
Life Insurance Need by Generation
Source: 2021 Insurance Barometer
18%
29%
36%
43%
13%
15%
8%
2%
69%
56%
56%
55%
BABY BOOMERS
GEN X
MILLENNIALS
GEN Z
Non-Owners WhoNeed Coverage
Owners Who NeedMore Coverage
No Perceived Needfor Coverage
16
31%
31%
34%
34%
35%
46%
49%
56%
64%
72%
41%
43%
42%
46%
43%
51%
62%
65%
75%
81%
Do not trust insurance agents/financial advisors
Do not trust insurance companies
Not offered by my employer
No one has approached me
Would not qualify for coverage
Don't like thinking about death
Haven't gotten around to it
Not sure how much I need / what type to buy
Other financial priorities right now
It is too expensive
Un-insured Under-insured
Reasons for Not Owning (More) Life Insurance
Source: 2021 Insurance Barometer
Non-owners who
need coverage
Owners who need
more coverage
17
Month Insurance Barometer Releases
March Press release, Infographic, Social Media,
CEO/President’s video (Dave & Faisa)
April Life Insurance Conference workshop, Press release,
Infographic & Primary report
May/June Black Americans report, Webinar, Technical
Supplement
Next Steps
Source: 2021 Insurance Barometer
18
Key Take-Aways
Source: 2021 Insurance Barometer
1. Consumer demand or “need” for coverage has increased and remains strong.
• The gap between “I need” and “I “have” life insurance has doubled since 2019, further
emphasizing the need for the industry to respond proportionally to the existing demand.
2. The pandemic has driven an increase in purchase intent.
• 31% indicated they are more likely to buy life insurance due to COVID.
• The % of respondents indicating an increased likelihood to buy increases with income.
(i.e., 42% of respondents with incomes of $150K+ indicated they were more likely to buy
due to COVID.)
• Strongest among Millennials, Gen Xers, Black, and Hispanic respondents.
3. Consumer engagement and education will be the keys to meeting this increased demand
19
Questions & Answers
Source: 2021 Insurance Barometer
Your Trusted Source for
Industry KnowledgeFor more information contact:
James T. Scanlon
Senior Research Director
860.285.7738
21
Life Insurance Ownership by Type 2011 to 2021
Source: 2021 Insurance Barometer
63%
59%62%
57% 57%60% 59% 59%
57%54%
52%
36% 36%34%
32% 31%34%
29%32%
29%
25% 25%
41%
36%
41%38% 38%
41% 41%39% 39% 39% 39%
2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1
Life insurance (Any) Group/Employer-sponsored life
Individual life
Civilian Labor Force Participation RateLife Insurance Ownership Trends
22
Life Insurance Ownership by Type 2011 to 2021 – Insureds
Source: 2021 Insurance Barometer
• Those with both
coverage types rose
to 22% this year,
from a low of 18% in
2020.
• This remains short
of the 28% high-
point in 2011.