Life Insurance Awareness Month: Overcoming 3 Common Coverage BarriersMost people know that life insurance is important, but fewer people understand their own coverage needs and options. September is Life Insurance Awareness Month, making it the ideal time to address some of the common barriers that can leave individuals and families underinsured.
Many Americans Are Underinsured
The 2025 Insurance Barometer Study from LIMRA found that 40% of American adults believe they need more life insurance. Around half of millennial and Gen X individuals say they don’t own any life insurance at all, and 47% of people surveyed say they would have trouble paying living expenses within just six months of their primary wage earner’s death.
A study from PYMNTS Intelligence found that 62% of U.S. consumers say they live paycheck to paycheck, including 48% of U.S. consumers who earn more than $100,000 a year. Most Americans depend on a regular paycheck, and they know that if their family’s income stops due to an unexpected death, they’ll start experiencing financial problems quickly. They also know that life insurance can provide an essential financial cushion in the event of an unexpected death. Yet many people are still going without the life insurance coverage they need. The reason often comes down to three common barriers.
Barrier 1: Overestimating the Cost of Coverage
A basic term life insurance policy is often a very affordable way to secure adequate protection. However, many people don’t know this.
LIMRA asked people to guess the premium of a $250,000, 20-year level term policy. Healthy adults ages 18 to 30 thought coverage was around 10 to 12 times more expensive than the actual cost. Older adults also overestimated the cost significantly.
Life insurance costs vary depending on the type of policy, the size of the benefit and the risk level of the insured, but affordable options are available. Too many people price themselves out of coverage without learning how much life insurance actually costs.
Barrier 2: Depending on Work-Based Coverage
Many employers offer life insurance as an employee benefit, and that’s great. However, workers who depend on work-based coverage alone may not have sufficient protection.
According to LIMRA, 55% of U.S. workers say they have life insurance through their job. Of these adults, 49% say their families would experience financial hardship in less than six months after the unexpected death of a wage earner. When you consider that work-based policies offer a median benefit of $20,000 or one year’s salary, it’s not surprising that many people would struggle despite having coverage. Think about it – if your family lost a major income source, how long would $20,000 last? Even if you have enough coverage for one year, what happens after that?
Workplace life insurance is a great supplemental benefit, and it tends to be an inexpensive way to secure additional coverage, but most families need more. Stacking an individual policy with a workplace policy can provide more robust coverage.
Barrier 3: Procrastination
Many people intend to buy life insurance, but other priorities keep getting in the way.
Some of these competing priorities are financial. People plan to buy life insurance once they take care of other, more pressing expenses, such as home repairs or college funds. Because people tend to overestimate the cost of life insurance, they incorrectly assume that it’s impossible to handle both financial issues at once.
Other competing priorities come down to time. People are busy, and they don’t know when they’ll find time to compare life insurance plans, fill out applications and undergo medical exams. Once again, common misconceptions may make this seem like more of a problem than it really is. For example, even though some life insurance policies require a medical examination, there are many life insurance options that don’t require an exam.
Everyone is guilty of occasional procrastination. Unfortunately, when it comes to something as important as life insurance, procrastination can leave loved ones vulnerable. Nobody knows what tomorrow will bring, and the sooner you purchase coverage, the better prepared you are.
Turn Awareness into Action
Life Insurance Awareness Month is an opportunity to look beyond assumptions about cost, convenience and existing workplace benefits and determine whether your coverage truly reflects your financial responsibilities. Heffernan Insurance Brokers can help you assess your needs and compare your life insurance options.
