Only 51% of Americans own life insurance, and a primary reason is that it's a product that remains highly misunderstood.  This is the latest finding from Northwestern Mutual's 2015 Planning & Progress Study.

This annual study exploring Americans' attitudes and behaviors towards finances and planning reveals that one of the greatest barriers to life insurance ownership is knowledge and education.  For example, 14% of U.S. adults say they don't own life insurance because they don't know much about it or never thought about it. Other barriers include cost and prioritization, with two in five claiming life insurance is too expensive (43%) and nearly one in three saying it's a low priority (31%) compared to other expenses.

"At a time when so many Americans are wrestling with how to achieve long-term financial security, people are overlooking one of the most critical tools to meet that goal," says David Simbro, senior vice president of Life and Annuity Product, Northwestern Mutual. "Unfortunately, too many people lack a full understanding of all the ways permanent life insurance can be used to provide financial security.  They see it as a single utility product, when it's really more like a Swiss Army^® knife – it can be used for an amazingly diverse range of needs."

While the majority of the population is aware of the death benefits permanent life insurance provides, other uses aren't well understood:

• Only 23% know it can be used to pay mortgages and debts

• 15% know it can be used to pay estate taxes

• 12% know it can be used to instantly create an estate

• 8% know it can be used as a source of cash flow in retirement

• 5% know it can be used to help pay for college

"Managing risk and creating financial flexibility are critical elements to financial planning, but too often get relegated to the shadows in favor of accumulating assets," says Simbro.  "But in an era of so much financial uncertainty – when longevity is increasing along with the cost of living – managing risk can't be overlooked.  Permanent life insurance is an ideal way to manage risk, address uncertainties, and still add cash value and financial flexibility to a portfolio."

Of the age groups surveyed, Millennials are particularly likely not to have given thought to life insurance, with twice as many (28%) saying they have never thought about it or don't know much about it, compared to the general population (14%) who said the same.