Many Americans Misinformed About the Cost of Life Insurance

September 10, 2012 at 09:30 AM

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The pervading misconception that life insurance in unaffordable for most people reared its head again with 45% of adults telling a InsuranceQuotes.com poll that they feel that life insurance "costs too much."

InsuranceQuotes.com, a Bankrate company used Harris Interactive to poll 2,192 people about their use of life insurance for Life Insurance Awareness Month, the results suggest that awareness of the need as well as the affordability of the products need clarification.

Thirty-nine percent of US adults reported that they did not have life insurance while 61 percent who do have some level of protection are underinsured.

The most common level of coverage was between $25,001 and $100,000. Of those with coverage, 30 percent reported that they have a term life policy while another 30 percent reported having a whole life policy and another thirty percent reported that they were "not at all sure" about what type of policy they held.

The overall lack of knowledge about life insurance is hurting customers. The study found that if consumers shopped around they could possibly get better coverage for less money. Sixty-eight percent of those with insurance reported that they had never changed life insurance providers and 64 percent said that they have held their current policy for more than five years. "Plenty of people who haven't compared prices in a while could potentially save money and get a better policy with just a little bit of effort, since many different insurers are aggressively competing for customers," said John Egan of InsuranceQuotes.com.

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