Coverage gap among Gen Xers has widened

Inadequate life insurance coverage, most notably Americans in the middle market, has long been a depressing industry fact. One might have thought the magnitude of the problem had lessoned since the Great Recession, as Americans took steps to put their financial houses back in order.

In fact, however, the problem has worsened: A new survey of 1,000 Americans age 25 and over with dependents, conducted by The Futures Company on behalf of New York Life, shows the life insurance “gap” — the difference between the median amount of life insurance coverage Americans have and the amount they require based on self-reported needs — has grown.

And this chasm is widest among post-baby boom Generation Xers. The report pegs the coverage gap in 2013 at $448,996 versus 362,688 at the height of the Great Recession in 2008 — an increase of 24 percent.

GenX Life Insurance Coverage Gap

What accounts for the growth in the gap? Chris Blunt, president of the insurance group at New York Life, attributes the change to the impact of the economic downturn on Gen Xers, putting them at increased risk of financial loss.