Hartford Study: Life Insurance Understanding Lowest Among Low-Income Workers

Less educated, younger workers also showed lower rates

In a survey of American workers employed full-time, lower-paid employees showed a more limited understanding of life insurance than those with higher incomes. Less educated workers and Gen Y workers also showed lower understanding and participation rates.

The survey, released Wednesday, September 1, by The Hartford Financial Services Group, found just 29% of workers who made less than $50,000 said they "completely understand" life insurance. Fewer than two-thirds of those workers had life insurance through their employers.

Just 30% of workers with a high school education said they completely understood life insurance, compared with almost two-thirds of workers with a college education.

Life insurance participation rates are increasing overall, however, especially among women. In 2010, 69% of workers took advantage of employer-sponsored life insurance benefits, compared with 64% in 2009. Among women, the 2010 participation rate is 69%, up from 60% in 2009. While participation among men increased at a slower pace, they are still more likely to sign up for benefits. Seventy percent of men enrolled in life insurance benefits at work in 2010, up from 67% in 2009.

Although younger workers don't need as much life insurance coverage, the survey found they are less likely to understand the benefit. Sixty-four percent of workers between ages 18 and 29 said they "completely or mostly understand life insurance" and participate in their employers' plans. Over three-quarters of Gen X workers said they understand life insurance and 70% participate, however. Among boomers, 79% say they understand the benefit, and 71% participate.

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