Research reveals that the most common reason Americans lack adequate life insurance is that they often have contending financial priorities. The second most reason is that they assume they cannot afford it.
Let’s look at the numbers behind the life insurance coverage gaps in the U.S., along with some misconceptions that cause it.
- As many as 85 percent of people agree that most people should have life insurance; however, only 62 percent actually have it.
- As of 2010, only 44 percent of households in the US had individual life insurance — a 50-year low. Compare this to 72 percent in 1960 and 55 percent in 1992 — a huge difference.
- Around 40 percent of Americans who have life insurance think their coverage is not enough.
- Approximately 70 percent of American households have children under the age of 18, and they would have problems meeting day-to-day expenses within a few months if their main wage earner died today. Additionally, 4 out of 10 households with children under the age of 18 claimed that they would have a problem meeting day-to-day expenses immediately.
- The estimated unmet life insurance need in the US amounts to $15.3 trillion.
Why do people fail to buy the life insurance coverage they need? Around 83 percent of consumers say they don’t buy more insurance simply because it’s too costly. But many overestimate the cost of life insurance. Most Americans assume a 20-year, $250,000 level term life insurance policy would cost $400 per year for a healthy 30-year-old person. In reality, it would only cost $150.
Your actual costs would vary depending on your age, gender, location and health status. However, insurers have revised their mortality tables to reflect Americans’ longer life spans, so if it’s been a while since you requested a quote for life insurance, please contact us—you might be pleasantly surprised.