The protection gap— the difference between the resources needed and the resources at hand to maintain a dependents’ current living standards after the death of a primary breadwinner now stands at $20 trillion in the US.
The findings come from a recent report by The Swiss Re Group, a wholesale provider of reinsurance, insurance and other insurance-based risk solutions headquartered in Zurich, Switzerland.
The report, The Mortality Protection Gap in the US underscores a much talked about issue within the life insurance industry; the fact that Americans, as the report states, are underinsured by “staggering dimensions” and all of the repercussions that blossom out of that statistic.
The report maintains that the prevalence of being underinsured and the mortality protection gap that accompanies it can have real and substantial impacts on the economy and the country’s fiscal health as a whole.
What Your Peers Are Reading
For example, when a primary breadwinner dies and leaves his family egregiously underinsured thus driving the family into relative poverty, that family may seek assistance from public funds which are already over-extended.
The economic hardship that has pervaded and stretched public funds over the last decade has also been a precipitating force for enhancing the protection gap. The study says that since 2001 the protection gap has increased by 10 percent while life insurance coverage per family has declined by 24 percent over the same period.