What You Need to Know
- The reinsurer says only about 46% of world households have the resources to maintain living standards if the primary breadwinner dies.
- The North American mortality gap stands at $65 billion.
- About 55% of North American households can handle the loss of the primary breadwinner's income.
The COVID-19 pandemic made the entire world economy more brittle in 2020, and one factor was an increase in the life insurance protection gap, according to a Swiss Re Institute report.
Institute economists calculate the life insurance protection gap when they’re creating annual Macroeconomic Resilience Index figures for individual countries and the world.
The gap between the amount of life insurance, savings and other mortality-protection resources households have and the mortality-protection resources those households need increased only slightly in North America in 2020, to $65 billion, from $64 billion in 2019.
But the world life insurance protection gap increased to $408 billion, from $385 billion.
What Your Peers Are Reading
The Macroeconomic Resilience Index, or financial stability index, fell to 0.44 in 2020, from 0.62 in 2019.
The U.S. resilience index fell to 0.55, from 0.80.
The resilience index includes many factors in addition to mortality protection adequacy, such as financial market development and human capital factors.