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


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


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


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


6

Relative concern

for life insurance

has increased, it

moved into 3rd

place in 2020.

Financial Concern Hierarchy – 2011 to 2021


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


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


Life Insurance Ownership by Gender & Generation

National

average

= 52%

Gender Generation

9

Life Insurance Ownership Profiles - 2021


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


Life Insurance

Ownership Gap =

18-points

11

Life Insurance Need – Owners & Non-Owners


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


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


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




14

Life Insurance Need by Race/Ethnicity


27%

33%

32%

20%

11%

14%

14%

7%

62%

53%

55%

73%

WHITE

HISPANIC

BLACK

ASIAN




15

Life Insurance Need by Generation


18%

29%

36%

43%

13%

15%

8%

2%

69%

56%

56%

55%

BABY BOOMERS

GEN X

MILLENNIALS

GEN Z




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


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


18

Key Take-Aways


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


Your Trusted Source for

Industry KnowledgeFor more information contact:

James T. Scanlon

Senior Research Director

860.285.7738

[email protected]

21

Life Insurance Ownership by Type 2011 to 2021


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


• 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.

The Life Insurance Need Gap - LIMRA

Documents

Transcript of The Life Insurance Need Gap - LIMRA