The number of workers signing up for life insurance benefits increased to 69% in 2010 from 64% in 2009, according to a new report.

Women showed the biggest jump in participation, to 69% this year from 60% last year, according to the survey of full-time workers by Hartford Financial Services Group Inc. (NYSE: HIG), Hartford. Men increased their participation by 2% to 70% in 2010.

But the survey found America’s lower-income and less-educated workers lag behind employees with higher household income and education in understanding and purchasing life insurance.

Employees with a high school education have the lowest level of understanding of life insurance and are least likely to sign up for it (65%) compared to workers with a college degree, the survey reports. Thirty percent of workers with only a high school education say they completely understand life insurance.

Survey respondents with a household income of less than $50,000 are least likely to completely understand life insurance (29%) and are least likely to sign up for this benefit (64%).

Generation Y (ages 18-29) has the lowest level of life insurance understanding and participation compared to Generation X (ages 30-44) and Baby Boomers (ages 45-65), the Hartford’s survey found.

Of Gen Y respondents, 64% say they completely or mostly understand life insurance, compared with 77% of Gen X and 79% of Boomers. Gen Y has a 64% participation rate, compared to 70% for Gen X and 71% for Boomers.