LIMRA’s research consistently has found that not enough Americans have life insurance. The coverage gap is so wide that it can be measured in the trillions of dollars. LIMRA research finds even though Americans largely know they need more life insurance, and recognize it’s good to have, they still do not buy the coverage they need.
Just three years ago, the coverage gap — which LIMRA defines as total life insurance needs less existing life insurance — was $15 trillion. Now it’s a trillion dollars more than that. (LIMRA used numbers from the Federal Reserve Board’s Survey of Consumer Finances to do the math.)
Alarmingly, for people who manage their household money, over half believe they would run into financial difficulty within a matter of months if they died unexpectedly.
September is Life Insurance Awareness Month, when the industry touts the benefits of having life insurance. So what can the industry do?
People still tend to vastly overestimate the cost. Insurers and financial professionals should continue educating consumers about life insurance’s affordability. With life insurance ownership at its lowest level since 1960, they can also suggest lifestyle changes. Quitting smoking and otherwise staying healthy, buying a policy earlier in life, and keeping a good driving record are all ways to save.
In addition, the modern American has more financial demands than ever before. Consumers cite the cost of cell phones, the Internet, and cable as necessities that prevent them from buying life insurance, according to LIMRA research. Professionals can suggest ways that consumers can balance these short-term expenses with a longer-term investment in their family and in their financial security.
Life insurance can protect your assets, allow you to accumulate earnings consistently and safely, and ensure long-term security for you and your loved ones. Life Insurance Awareness Month is the perfect opportunity for financial professionals to reinforce these facts.