A high percentage of Americans don't know much about life insurance. In a recent test, LIMRA gave 4,000 people a life insurance IQ test to gauge their knowledge and understanding of life insurance. Only 1,200 passed the 10-question exam and the majority, or 55 percent, answered fewer than five questions correctly.

"In addition to identifying the aspects of life insurance that consumers understand and where consumers admit to being in the dark, the study also shed light on some widespread misperceptions," said Jennifer Douglas, LIMRA associate research director for strategic and developmental research.

"With life insurance ownership at an all-time low, it is important that the industry not only overcome consumers' lack of knowledge about life insurance but address the misinformation that is out there confusing them and possibly having a negative impact on their image of the industry."