Amid the COVID-19 pandemic, more people in the US have become keenly aware of the need to protect their loved ones in the event of their death. According to the 2022 LIMRA Barometer Study, one in three (31%) US adults say they are more likely to purchase life insurance because of the pandemic.
Yet, the gap between those who need life insurance and those that have it has more than doubled since 2011. Over 100 million Americans are uninsured or underinsured, LIMRA reported.
"More people recognize and acknowledge the need for life insurance. But at the same time, more people are not choosing to make that financial step," said Debra Gangelhoff (pictured), vice president and general manager of life insurance at LexisNexis Risk Solutions, a risk data and analytics provider.
To help bring awareness to the life insurance gap, LexisNexis has teamed up with the non-profit organization Life Happens as a sponsor in its annual Life Lessons Scholarship. The program provides financial scholarships to college students and college-bound high school seniors who have lost a parent or guardian with little or no life insurance.
After screening several applicants, LexisNexis selected Virginia student Taylor Bush as its recipient of the Life Lessons scholarship. Bush's father, Ernest Bush, was a church building manager and a doting father of five. He contracted COVID-19 while on a church retreat and passed away in August 2020.
For Bush, the opportunity has lifted a weight off her family's shoulders. "It has been really hard. My dad was always my first call if I ever needed anything," she said.
Qualified entrants who submit essays or videos about how the death of a parent impacted their lives are eligible for scholarship money. Around $2.8 million in college scholarships have been awarded through the Life Lessons program since it began in 2005.
Gangelhoff commented: "When we heard Taylor's story of perseverance and grace in managing the tragic loss of her father, all while maintaining her exemplary academic work and lifting family members up during such a difficult period, we knew that she had to be our first Life Lessons Scholarship recipient. Taylor is truly an inspiration and embodies the spirit and drive that Life Happens serves."
Bush, who's pursuing a bachelor's degree in social work at Virginia Commonwealth University, said she is eager to help others the way she has been helped in her journey.
"In the third grade, I was diagnosed with a learning disability, so I was introduced early on to social workers who helped me get to where I am now," she said. "I feel it's important for me to pay that forward."
Life insurance has proved to be a key in providing families with a sense of financial security. Among insureds with financial dependents in the 2022 LIMRA Barometer Study, a majority (68%) feel secure, compared with 47% of non-insureds. The sentiment compounds when consumers have overlapping sources of coverage.
On the other side of the fence, most households are not prepared for the loss of a primary wage earner: 44% said they would fall into financial hardship if tragedy struck their family.
"Our goal with the scholarship was to drive awareness and help people understand that life insurance provides their family with a financial safety net," Gangelhoff said.
The LIMRA study also revealed the gender gap behind the life insurance gap. Only 46% of women report owning life insurance versus 53% of men. Uninsured women said life insurance was too expensive (39%) or cited other financial priorities (37%). 22% said they're unsure how much or what type to buy.
"There's a good bit of consumers in that gap segment who indicate a likelihood to buy, but they just haven't taken that step. Education is important to help consumers understand the different types of life insurance products available to them and the level of coverage that makes sense for their situation," said Gangelhoff.
Continuously engaging with consumers, particularly the younger Millennial and Gen Z generations, will be critical to addressing the life insurance gap.
"I think programs like Life Lessons are important to keep that awareness high and give consumers a pathway to take action and get a policy in place to protect their families," added Gangelhoff.
