Recently, a survey of Millennials (born between 1981-1996) asked participants to estimate the cost of a $500,000 20-year Arizona term life insurance policy for a healthy 30-year-old. The most common response was $1000 a year. The actual premium is under $25.00 a month, or $300 annually.
Over half of all Americans over-estimate the cost of life insurance by three-fold. Less than one third of Americans are very or extremely knowledgeable about life insurance according to multiple surveys.
The majority of Americans with life insurance (46%) have coverage through an employer, the face amount averaging $20,000. Unfortunately, $20,000 is not sufficient to cover an individual’s expenses, never mind the expenses of a family. There are 60 million un-insured or under-insured Americans… to the tune of $200,000 per family.
Life insurance companies are implementing many changes to address the issues of the un-insured and under-insured. Within the last two years many life insurance companies are now offering term life insurance that requires no medical exam.
Another example of change in the life insurance industry is how some companies are underwriting applicants using a “pay as you live” system. The system rewards policyholders with lower premiums who follow healthy behaviors such as exercise, healthy eating, and annual check-ups.