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“In a low interest rate environment like now, it should be 10 times salary,” he says.

Participants gave a number of reasons for not buying more life insurance: cost (74%), difficulty deciding how much to buy (52%), procrastination (50%), worry about making the wrong decision (43%) and a preference for other financial products (40%). (Most cited more than one reason.)

Kerzner notes that 78% of survey participants dont have a personal insurance agent, while 73% dont have a personal financial advisor or planner.

The lessons for producers and carriers: more education is needed.

“Nonbuyers think they cant afford life insurance,” Kerzner says. “But nobody has explained to them what it costs.”

As for procrastination, its the agents job to get past that, Kerzner notes. In fact, the survey seems to show theres plenty of work all around for the industry.

“We need more career agents making more calls, more often,” Kerzner says. “And they need to talk to financial advisors and leverage them by asking them to talk to their clients about risk products like life insurance, disability and long term care.”

Phil Harriman, a member of the executive committee of the Million Dollar Round Table, Park Ridge, Ill., says the study is a reminder that life insurance remains an unmet financial need for many consumers.

“Its perhaps easier to talk to people about investing money or saving for college,” he says. “But there is still a significant part of the public who wants to talk about what happens if they dont live long enough to take care of their families.”

Producers need to raise the subject of life insurance when they meet with clients and prospects, he says.

“This report is telling us people are looking for a peace of mind that is missing in their affairs,” says Harriman, a partner with Lebel & Harriman LLP, Falmouth, Maine.

The terrible events of 9-11, last years tsunami and terrorism in general are major reasons for the surge of interest in life insurance, experts say.

“They remind us all that things can change in the blink of an eye,” Harriman says. “And the roller coaster results of the financial markets also have shown people theres no guarantee in life.”

“Its good to hear the American public is beginning to understand,” ACLIs Graham adds. “Its a well-known fact that Americans are underinsured and havent saved as well as they should. If we can get the message out that life insurance is a critical factor that all Americans should be thinking about, the better off we are.”

Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.