Life Insurance Premium Surges, but Coverage is Still Falling Short for Many
Despite individual life insurance new annualized premium surging 10% in 2025, the fourth record-setting year in the past five, just over half of Americans (52%) say they own life insurance.
Nearly 100 million Americans report being either uninsured or underinsured.
These are some of the findings of the 2026 Insurance Barometer Study, conducted jointly by nonprofit industry trade associations LIMRA and Life Happens, presented at the Life Insurance and Annuity Conference last week.
While some people may not be able to afford life insurance, the study revealed that 40% of Americans overestimate the cost of a basic 20-year term policy for themselves. Interestingly, around 48% of all survey respondents said they were basing their estimate on a “gut feeling” or “wild guess.”
Younger people, particularly young men, greatly overestimate the cost of life insurance. Only 4% of consumers under age 30 correctly estimated a basic term policy’s annual premium.
“Young men pay a lot in car insurance and don’t realize that because they’re young and healthy they would pay pennies on the dollar for life insurance,” said Steve Wood, research director of LIMRA Markets Research.
The reasons for this may come down to a lack of knowledge or understanding of life insurance. The study, which has been conducted annually for the past 16 years, reveals that 37% of Americans say they are only somewhat or not at all knowledgeable about life insurance.
When it comes to how they gather information on financial or insurance products, 62% of consumers use social media. This is true among all income levels, with 60% of households making $200,000 or more per year saying they use social media for research.
When it comes to needing more information or having a question about insurance, investments or savings, however, 31% of consumers say they prefer having an in-person conversation.