Half of Americans Don’t Have Any Life Insurance

Nearly half of Americans don’t have a life insurance policy, according to a new study, with wide disparities based on age, gender, income and race.

A report from Western & Southern Financial Group found that just 51% of U.S. adults had any kind of life insurance.  

Of those who are covered, about a quarter (26%) only have a group life policy from their employer. While inexpensive and easy to get, group policies have low coverage limits, little room for customization and expire when you leave your job.

Perhaps not surprisingly, the odds of coverage increase with age: Just 36% of Gen Z had life insurance, according to the report, the lowest of any generation. That’s compared to 50% of Millennials, 55% of Gen X and 57% of Baby Boomers. 

“That number for Gen Z should be a wake-up call,” Troy Brodie, senior vice president with Western & Southern Life, told CNBC Select. “Too many Americans still view life insurance as something you don’t need until later in life. But that frame of mind leaves millions vulnerable financially.”

One of the key functions of life insurance is to protect your loved ones if they count on your income for major expenses, like a mortgage or a child’s college education. 

Despite this, many Americans don’t think about life insurance until they’re older — when the house is paid off, kids are grown and the need for coverage may actually be less critical. 

The cost of a life insurance policy increases as you get older, too, so waiting to enroll can add thousands of dollars to your premiums. 

“There is a widening gap between how younger Americans think about financial protection and how it actually works to solve long-term risk,” Brodie said. “Life insurance is not just about planning for the end of life — it’s about building financial security through all phases of life.”

The likelihood of having a policy rises with income, researchers found: Only 31% of Americans earning less than $50,000 a year have coverage, compared to 55% of those earning between $50,000 and $150,000.

Of Americans making $150,000 or more, nearly three-quarters (71%) have some kind of life insurance.

“Lower income earners are more financially vulnerable,” said Steve Wood, consumer markets research director for LIMRA, the insurance industry trade association. “Nearly half of households with incomes $50,000 or lower say they would experience financial hardship within a month of losing a primary earner.” 

The gender gap was fairly pronounced, with men 24% more likely to be covered than women.

The study also pointed to a racial divide: African-Americans had the highest rates of coverage, 58%, compared to just 52% of whites and 42% of Hispanics.

“Covid-19 saw an even greater awareness for the need for life insurance in the Black community, likely due to the racial disparities in health outcomes,” said Wood. “Final expense policies were an affordable way to ensure a loved one was buried how the family wanted.”

But life insurance can provide much more, he added.

“The challenge is communicating to all Americans how affordable a more comprehensive life insurance policy can be.” 

While younger Americans may put off life insurance, there are many reasons to get a policy now.  

1. Protect your home and other assets

If you were to die while your family was still dependent on your income, a life insurance policy can ensure they maintain their standard of living. That includes money for daily expenses, mortgage payments, education and other major expenditures.

2. Earn cash value

Permanent life insurance policies, like whole or universal life, build cash value over time that grows tax-deferred. You can tap into that value while you’re still alive to pay premiums, borrow against or make cash withdrawals.

Some policies earn dividends, a portion of the insurer’s profits that is returned to shareholders. Dividends are not guaranteed, but they can increase the value of your policy, reduce premiums or provide cash payments. 

Northwestern Mutual, one of our top picks for whole life insurance, announced a $8.2 billion dividend dispersal for 2025. That’s the industry’s largest ever and a result of the company’s strong performance and astute financial management.

3. Leave an inheritance

Life insurance can be an effective way to pass on wealth, either to your family or community. Unlike other assets, the death benefit is typically untaxed and goes directly to your beneficiary without getting tied up in the probate process or used to settle the policyholder’s outstanding debts first.

4. Cover final expenses

The average cost of a funeral ranges from $6,280 to $8,300, according to 2023 data from the National Funeral Directors Association. If you add viewings, upkeep and other options, it can easily rise about $10,000.

Burial insurance, also known as final expense insurance, is a whole life policy that covers burial, funeral and cremation, as well as outstanding medical and legal bills, estate fees and other end-of-life expenditures.

Applicants are typically guaranteed approval and payouts usually range from $10,000 to $30,000.

The Transamerica FE Express Solution, however, pays out up to $50,000 with no medical exam required. Approval can take as little as 10 minutes and the plan’s concierge service comes with free estate planning and assistance in filing legal documents and finding a funeral home.

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