Laura Bogart

Sat, Jun 28, 2025, 4:03 PM5 min read

When you’re mapping out your financial plan, there are certain bedrock accounts and products you likely always consider. You’ve got to have that emergency savings fund, preferably in a high-yield savings account. And retirement accounts — no financial plan is complete without them. You take advantage of your 401(k) employer match and contribute to a Roth IRA, too. Oh, and life insurance. You need a life insurance package as part of any quality financial plan.

For You: If a Financial Advisor Doesn’t Ask These 5 Questions in Your Consult, Keep Shopping

Check Out: Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck

Wait, what? If that last bit came as a “record scratch” moment of confusion for you, you’d hardly be alone. In a survey conducted by GOBankingRates and New York Life that focused on Americans’ attitudes and approaches toward personal finance, the team found that a substantial number of respondents didn’t consider insurance essential to their own financial planning — much to the consternation of financial advisors.

These experts disagree with the more laissez-faire approach that too many people take toward putting life insurance in their financial plan — indeed, they say it’s a core part of any good plan.

On a scale of 1-10, respondents were asked to rank how intensely they prioritized insurance in their personal plans based on how much they identified with the statement “Insurance (e.g., life, disability) is a necessary component of any financial plan” at number one — down to “Insurance (e.g., life, disability) is not connected to my overall financial plan” at 10.

Only 23.5% of overall respondents agreed as strongly as possible that insurance was a necessary component of any financial plan, with 12.6% saying that it doesn’t factor into their financial plans. Splitting the difference at number 5, 12.1% of respondents suggested that they kinda-sorta knew they should prioritize it. Why are the numbers of people who understand the importance of life insurance so relatively low?

For You: I’m a Financial Advisor: 3 Signs You’re on the Path to Building Generational Wealth

Melissa Murphy Pavone, founder of Mindful Financial Partners, has a theory — that people are conditioned to think they get enough coverage at work. While acknowledging that these plans can be a great start, she said they generally don’t offer enough coverage. Pavone explains to her clients that employer-provided life insurance usually provides only one to two times their salary, which likely won’t cover their family’s full financial needs.