The widely known and accepted purpose of life insurance is to provide financial security for loved ones after an individual’s passing. The benefits received can help maintain their standard of living, pay for funeral costs and remaining debts, and achieving future financial goals. Having the proper amount of life insurance is the foundation of any well-structured financial strategy, yet 48% of Americans don’t have any coverage according to an October 2024 article by Choice Mutual.
More than 100 million Americans are uninsured or underinsured, and 36% of uninsured Americans have said the reason for not purchasing insurance is because they do not know what type or how much is needed. This lack of awareness is especially prevalent in younger generations, as they tend to have lower percentages of insured adults.
Life Insurance Policy Ownership By Age Group
- Gen Z (age 18-26): 40%
- Millennials (age 27-42): 48%
- Gen X (age 43-58): 54%
- Baby Boomers (age 59-78+): 58%
It is common for people to have the mindset that the need for life insurance is not as dire for younger adults until they have established more significant assets or become responsible for dependents. However, as one grows older, their insurability worsens due to the potential development of health concerns, and insurance premiums will rise due to increased age. Therefore, it is very important for individuals to consider setting up proper life insurance while they are young and healthy to avoid having to pay higher premiums or be faced with the prospect of becoming uninsurable later in life.
For younger adults who have tighter budgets, term life insurance is a cost-effective option that will provide the opportunity for conversions to permanent policies later in life once such policies become more affordable. With more than 50% of American adults between the ages of 18-42 still without life insurance today, there are plenty of conversations still to be had to ensure these individuals have the knowledge to make a well-informed decision about their insurance coverage.
Remember, establishing a financial plan without addressing the need for insurance is only painting half the picture. Give the experts a Wholehan a call to learn more about how we can assist with your next life insurance case!