A study released Thursday by Genworth Financial found that almost half of Americans with household incomes between $50,000 and $250,000 do not have life insurance. Those who do own life insurance only have enough to cover 3.6 years of income for their family members.
The 2011 LifeJacket study was completed with the help of Dr. Gregory Fairchild, associate professor at the University of Virginia, Darden School of Business.
“The financial well-being of the average American household has been challenged in recent years,” Fairchild wrote in the report. “With a seemingly constant tide of negative, perplexing or unpredictable economic news, clearly some families are retreating, deciding to wait things out and let the spell of ‘bad weather’ pass.”
“While the industry has done an excellent job of offering products that meet the consumer needs, we now have the deep insight needed to bridge the coverage gap and bring consumers to the table,” Anthony Vossenberg, senior vice president of life and annuities at Genworth, said in a press release.
The report identified seven ways advisors can close the life insurance coverage gap:
1. New Thinking on “Trigger” Events. Genworth found that the time between a “trigger event” like a job change, marriage or new baby, and the actual purchase of insurance varies widely. Furthermore, gender affects how quickly a person is likely to purchase insurance. The report notes that “timing is everything in life and in life insurance.” Reviewing major changes in your clients’ lives can initiate a conversation about how their needs may have changed.
2. Just One Hour a Year. More than 60% of respondents with life insurance said they wanted to meet with their advisors at least once a year, but just 38% are actually doing so. Those who receive an annual check-up reported having more trust in their advisor. Still, clients want meetings to be short. Over three-quarters said they want meetings to be an hour or less.