Life Insurance in America: Understanding and Closing Coverage Gaps

Many families lack any life insurance. Who holds life insurance, who should own it, and what can we do to better protect families?

Read the Report

By Lisa Berdie, Meghan Greene

Program:

FinHealth Spend
Category:

Insurance

Tuesday, January 30, 2024

Life Insurance in America: Understanding and Closing Coverage Gaps

Why Do Many People Lack Life Insurance Coverage?

Life insurance can provide a financial lifeline to families facing the unthinkable. Upon the policyholder’s death, life insurance guarantees a lump-sum payment that can cover funeral expenses, replace lost income, or even provide an inheritance. Although the COVID-19 pandemic heightened awareness of the need for life insurance, many people in America remain uncovered and have limited understanding of the market.¹ Based on an analysis of data from the 2023 FinHealth Spend survey, this report examines the state of the life insurance market, why individuals seek out life insurance, and opportunities to expand access to coverage.

Key Findings

Read our full report to learn more about these key findings, along with strategies for insurers and employers to connect more people who could benefit from life insurance.

- Key Finding 1: Despite increased interest in life insurance during the pandemic years, almost 40% of the population lacks any kind of policy.
- Key Finding 2: More Americans hold individual life insurance policies than employer-sponsored policies.
- Key Finding 3: Black and Latinx individuals less frequently have employer-provided life insurance than White households.
- Key Finding 4: A third (34%) of households with children report having no life insurance coverage.

Data Spotlight

Almost 60% of part-time workers lack any life insurance coverage.

Horizontal bar graph displaying the breakdown of the percentage of full-time and part-time workers that are insured by an employer policy, their own policy, both or no life insurance

Note: Full-time workers N = 2,239; part-time workers N = 418. * Statistically significant difference compared with full-time workers (p < 0.05).

About The FinHealth Spend Report

The FinHealth Spend Report, previously known as the Financially Underserved Market Size Study, is one of the Financial Health Network’s longest-running research initiatives. The report analyzes household spending on dozens of financial products and services, leveraging extensive secondary research as well as a nationally representative survey on consumer spending. Through this initiative, we gain insight into the impact that interest and fees have on families in the United States and uncover disparities in our system.

Read the Report

Our Supporter

The FinHealth Spend Report is made possible through the financial support of Prudential Financial, Inc. The insights and opinions expressed in this report are those of the Financial Health Network and do not necessarily represent the views or opinions of our partners, funders, and supporters.

Endnotes

James T. Scanlon, “What Consumers Don’t Know About Life,” LIMRA, LIMRA MarketFacts®, 2020.

Written by

Lisa Berdie

Director, Research

Financial Health Network
Meghan Greene

Policy & Research Advisor