NEW YORK (TheStreet) — Most Americans say they won't buy life insurance because it's too costly. Most don't know what it costs.
Nonprofit organization Life Happens — which just happens to be supported by 140 insurance companies and financial service organizations — found that 80% of consumers have no idea what life insurance costs. Members of Generation X think it's 119% higher than what it is, while Millennials misjudged the average cost by 213%.
Unfortunately, because the folks selling life insurance are about the only ones willing to tell anyone what life insurance costs, those views of its expense probably aren't changing anytime soon. The Life Happens study found that 30% of Americans believe they need more life insurance, while 43% they'd be in a tough spot in six months if a wage-earning member of their family died. That said, 54% of Americans have absolutely no plans to buy life insurance within the next year.
"We've consistently seen over the last five years that consumers think life insurance is more expensive than it really is, and now we're seeing many are also confused as to what factors determine the cost for life insurance," says Marvin Feldman, president and chief executive of Life Happens. "We need to help educate the public about how affordable life insurance can be and the factors they can control to ensure they get the best and most comprehensive protection possible."
When life insurance is considered way too costly, it isn't considered a priority. When it isn't a priority, it takes a backseat to just about everything else. Among the youngest consumers, 29% percent of Millennials cited saving for vacation as a priority over buying some or more life insurance. Meanwhile, 23% of Gen Xers would rather go out to eat, hit the movies or go shopping than buy more life insurance. Even 49% of those 65 and older cited paying for expenses such as Internet, cable and cellphones as more important than life insurance — and 60% of Millennials said they agree. It's somewhat of a gamble, but they like the odds.