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Life Coverage Gap Grows: 2021 Insurance Barometer Study

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What You Need to Know

  • The percentage of consumers who say they have need live coverage and don't have it grew to 18%.
  • Women are more likely than men to say they have a life coverage gap.
  • Many of the highest-income survey participants reporting having a gap.

The percentage of U.S. adults who say they have a life insurance coverage gap is continuing to grow.

The percentage of survey participants who said in January that they needed life insurance and had none increased to 18%.

That was up from 16% in January 2020, and up from just 7% in 2011.

Life Happens and LIMRA have included data on the life coverage gap in a new summary of some of the results from their 2021 Insurance Barometer online survey.

Life Happens is an Arlington, Virginia-based group that promotes awareness of life insurance and related products, such as disability insurance.

LIMRA is a Windsor, Connecticut-based financial services research group.

Life Happens and LIMRA started the annual Insurance Barometer survey series in 2011. The survey program pulls in responses from about 3,000 U.S. adults every year.

Reasons

The increase in the life coverage gap has been due mainly to a drop in the percentage of participants who say they have life insurance.

About 70% of the participants in the new survey said they needed life insurance. Participants were about as likely to say they needed life insurance in 2011 and in 2020.

The percentage of participants who said they have life insurance fell to 52%. That was down from 54% in 2020, and down from 63% in 2011.

Individual Life vs. Group Life

The decrease in the percentage of survey participants with life insurance appears to be due mainly to a decrease in the number of people who get group life coverage from their employers.

The percentage of Barometer survey participants with life insurance who said they had only individual life insurance was 52% this past January. That was down from 55% in 2020, but it was up from 40% in 2011.

The percentage of consumers with only group life coverage, or a combination of group life coverage and individual coverage, fell to 48% this year, from 60% in 2011.

Demographics

Analysts have broken the new Barometer survey results down several different ways.

Sex: Thirty-two percent of the women surveyed, and 24% of the men, said they needed life insurance and had none.

Race and Ethnicity: The percentage of participants who said they needed life insurance and had none was 20% for the Asian participants, 27% for the white participants, 32% for the Black participants, and 33% for the Hispanic participants.

Income: The percentage of participants who said they needed life insurance and had none was 45% for those with annual household income under $50,000; 28% for participants with annual household income ranging from $50,000 to $99,900; 18% for participants with annual household income ranging from $100,000 to $149,900; and 17% for participants with annual household income of $150,000 or more.

(Photo: Monkey Business Images/Shutterstock)