Ownership of individual life insurance has hit a 50-year low, according to a new LIMRA study.
The Trends in Life Insurance Ownership study, conducted every six years by the life insurance lobbying and marketing organization, found that only 44% of U.S. households have individual life insurance. The number of U.S. households that have no life insurance whatsoever is growing. Today, 30% of households (35 million) have no life insurance coverage, compared to 22% of households in 2004. Among households with children under age 18, which LIMRA argues have the greatest need for life insurance, 11 million have no coverage.
“The numbers tell a grim story,” said Robert Kerzner, CLU, ChFC, president and CEO of LIMRA, LOMA, and LL Global, in a statement. “Today there are 11 million fewer American households covered by life insurance compared with six years ago. A majority of families either have no life insurance or not enough, leaving them one accident or terminal illness away from a financial catastrophe for their loved ones.”
According to the study, more than 40% of Americans say a major reason they have not bought more life insurance is because they have other financial priorities right now, such as paying off debt or saving for retirement. However, the drop in life insurance ownership is not because families are not feeling vulnerable. Among households with children under 18, four in 10 say they would have immediate trouble meeting everyday living expenses if the primary breadwinner died today. Another three in 10 would have trouble keeping up with expenses after several months.