Industry research group LIMRA says the life insurance coverage gap in the United States now stands at $16 trillion.
Three years ago, LIMRA used numbers from the US Federal Reserve Board’s Survey of Consumer Finances to determine the gap between the total amount of life insurance that should be in place to meet existing needs and the actual amount of coverage in force, and calculated that it came to $15 trillion. In a press release issued earlier this week, LIMRA says this gap has now widened by another trillion dollars.
LIMRA notes that its surveys have shown that although Americans know they need more life insurance and recognize that it is good to have, they still have not taken out the coverage they require. In fact, the organisation’s research shows that over half of the people who manage their household's finances believe their families and dependents would run into difficulties within a matter of months if they were to die unexpectedly. LIMRA says that part of the problem is that people tend to vastly overestimate the cost of life insurance.
"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," says LIMRA. "Quitting smoking and otherwise staying healthy, buying a policy earlier in life, and keeping a good driving record are all ways to save."