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The percentage of Americans who have a life insurance policy is declining, according to a new study by J.D. Power. Its 2020 U.S. Life Insurance New Business Study found that the decline is largely driven by consumers under the age of 45, many of whom consider life insurance unnecessary, too expensive, or too complicated to purchase.

Life Insurance Remains a Mystery to Many

Depending on the type of policy, life insurance can be expensive and complicated, as study respondents said. However, term insurance, which is generally the best option for most consumers, is cheap and relatively simple.

Unfortunately, the study found that the workings and benefits of life insurance policies still remain mysterious to consumers, which decreases the chances of them buying one. That can leave individuals and families financially devastated if a loved one passes away.

Life insurance professionals, including agents, advisors, and carriers, can help dispel some of the myths of life insurance and highlight the benefits, according to the study.

Specifically, J.D. Power recommends that insurance professionals make sure that prospects understand coverages and costs, and keep them up to date on the status of their application for insurance once it’s been submitted.

Other Findings of the J.D. Power Study

Among the study’s other findings:

• Just 44% of consumers shop around and compare life insurance quotes from multiple insurers.
• Roughly three-fourths of consumers who purchased a policy said they picked it because it had the lowest price.