10 things you never knew about life insurance

Life insurance is valuable protection for your family. It's important to understand the ins and outs of this important coverage and what it can do to help provide peace of mind for your family today and financial security for the future.

However, many people still don’t have a firm grasp on what life insurance is and why they should have it. Start learning with these essential life insurance facts.

If you already have life insurance, you’re in good company. In 2023, 52% of all U.S. adults were covered by some type of life insurance. That number jumps to 60% when looking at just millennials and Gen Zers.

If you think you can’t afford life insurance, that’s likely not the case. One of the many myths that persist about life insurance is the belief that it’s cost-prohibitive. In reality, the average cost of life insurance in 2023, according to Policygenius, is $26 per month.

Many aspects of our lives are digital now, and that goes for life insurance too. Among millennials and Gen Zers, buying online is one of the most popular ways to purchase life insurance (in addition to through their financial advisor or workplace).

You don’t have to worry about your partner, children or other beneficiaries being taxed on a life insurance payout. The proceeds a beneficiary receives from the death benefit of a life insurance policy are generally not includable in gross income and don't have to be reported to the IRS (according to IRS.gov). We recommend consulting with a tax professional to determine what's best for your situation.

Life insurance ownership has increased 6% among Gen Z and 3% among millennials from 2022 to 2023. Additionally, 44% of Gen Zers and 50% of millennials plan to purchase life insurance in 2023.

Some people think they don’t need life insurance because they’re young and healthy, but that’s exactly why they should get covered now. The younger you are, the lower your premiums will likely be. For instance, if you’re a healthy female seeking $1,000,000 of coverage for 20 years, a term life insurance policy cost could increase as much as 278% between age 30 and age 50.

In 2022, life insurance benefits and claims totaled $797.7 billion, including life insurance death benefits, annuity benefits, disability benefits and other payouts.

53 million Gen Z and millennials believe they don't have enough life insurance. In addition, in 2023, a record number of people (at 39%) reported an intention to purchase life insurance in the next year.

In general, men are more likely to purchase life insurance — particularly outside of their workplace — than women are.

Although it might feel overwhelming, the evidence is clear — life insurance is a smart choice. And now that you have the facts, you can be confident in your decision to purchase life insurance.

Get off to a strong start with Ally. We’ve teamed up with  Ladder  to offer innovative term life insurance with an easy online application process.