LIMRA Study Reveals Life Insurance Coverage Gap Amid Strong Market Demand

Despite widespread recognition among Americans of the importance of life insurance, actual coverage rates have declined to just over half of the population, down 63% since 2011. LIMRA's 2024 Insurance Barometer study highlights that while approximately 100 million Americans acknowledge a need for life insurance, only about 9.4 million policies were sold in 2024, indicating a persistent gap between intent and purchase behavior.

Research presented by LIMRA and Bain & Company underscores that the demand for life insurance spans across all age groups and income levels, disputing any notion that low coverage is confined to specific demographics. The major barrier identified is consumer overwhelm and product complexity, which deters many from navigating the purchase process without professional guidance.

Education emerged as a critical factor in converting prospects into policyholders, with nearly half of respondents stating a strong need to understand life insurance before buying. However, many consumers are turning to social media platforms for financial information, especially millennials and Generation Z, where misinformation and superficial AI-driven content may hinder informed decision-making.

The study also notes that artificial intelligence search tools can create marketing challenges by providing users with summary answers instead of directing them to detailed company resources, reducing companies' visibility to potential buyers. Additionally, widespread misconceptions about the cost of life insurance—where consumers overestimate premiums by six to ten times—further suppress purchase rates despite the relative affordability of current policies.

Financially, the life insurance market showed modest growth in 2024, with new annualized premiums rising 4% to $16.2 billion and policy counts remaining stable. Experts suggest that aligning marketing with distribution efforts could unlock significant growth potential given the existing market demand.

This analysis signals that enhancing consumer education, leveraging accurate digital marketing strategies, and improving accessibility could be key to mitigating the life insurance coverage shortfall. The ongoing record-high premium levels reflect a steady, though untapped, appetite for life insurance products among U.S. consumers.