Life Insurance Coverage Gap Widens Again – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Life Insurance
Topics
    • Life Insurance
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Content
    • Webinars
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
Sign in or register to be an INNsider.
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
  • Insider
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
INN Exclusives
Life Insurance RSS Get our newsletter
Order Prints
June 11, 2014 Life Insurance No comments
Share
Share
Tweet
Email

Life Insurance Coverage Gap Widens Again

By Cyril Tuohy InsuranceNewsNet

By Cyril Tuohy

InsuranceNewsNet

The difference between the median amount of life insurance coverage in place compared with the amount needed to cover self-reported needs – known as the insurance coverage gap – widened by more than $30,000 in the five-year period ending in 2013, a new study finds.

Previous studies had found the gap to be growing, but the latest findings still came as a surprise, said Chris Blunt, co-president of the Insurance and Agency Group of New York Life, which commissioned the Life Insurance Gap survey.

“It’s no surprise that Americans are underinsured,” Blunt said in a press release. “What did surprise us was the magnitude of the gap and the fact that it has grown so dramatically since 2008, putting families at even greater financial risk.”

The coverage gap in 2013 was measured at $320,000, an increase of $30,622 compared to the gap that existed in 2008, the survey found.

The gap is calculated by subtracting the median amount of life insurance coverage in place from the amount needed to cover self-reported family needs in the event of the loss of a breadwinner.

In 2013, the amount of coverage families said they needed was $540,000, but the median amount of life insurance coverage in place only came to $222,000, a gap of $320,000.

In 2008, the amount of coverage families said they needed was $589,378, but the median amount of life insurance coverage in place was $300,000, a gap of $289,378.

The gap has grown to $320,000 in 2013 from $298,378 in 2008, an increase of 11 percent over the five-year period, the survey found. The wider the gap, the thinner the insurance protection and the more difficult it becomes for families to surmount financial hardships.

The widely-followed survey also found big differences in the coverage gap based on geographical regions of the country.

Survey respondents located in the West reported the highest coverage gap: $457,000. They were followed by families in the Northeast with a gap of $334,000, the South with a gap of $302,000 and the Midwest with a gap of $229,000.

Underscoring the idea of the gap, the survey also found a similar divide between people’s perception of insurance and the reality of their insurance coverage.

For instance, the survey found that 60 percent of respondents believe they have enough life insurance coverage when in reality only 20 percent have enough life insurance to meet their stated needs.

Similarly, Americans want their life insurance coverage to provide for them for 14 years beyond the death of a breadwinner, yet existing coverage only provides enough to cover three years beyond the breadwinner’s death.

The 2013 survey was conducted by The Futures Company which surveyed 1,004 people from April 24 to May 1. Participants were at least 25 years old, married or with dependents, and with annual household income of at least $50,000.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

© Entire contents copyright 2014 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

 

Older

Why Life Agents Should Convene Family Meetings

Newer

Annuities Put The Guarantee Into Retirement Planning

Advisor News

  • Retirement Savers Remain Confident Despite Short-Term Woes
  • City of Memphis Helps Employees With Financial Wellness Programs
  • IRI CEO: ‘I Am Optimistic for Our Industry’s Future’
  • 2/3 Of Near-Retirees Failed Or Barely Passed A Basic Social Security Quiz
  • Crypto As National Currency? Maybe Not A Good Idea
More Advisor News

Annuity News

  • LibertyMark Freedom Fixed Indexed Annuities Launch
  • Nationwide Adds BNP Paribas Global H-Factor Index To FIA
  • Transamerica Launches Structured Index Advantage Annuity
  • Recommending FIAs: Start With The Client’s Objective
  • NC Man Wins First $5 Million Prize In Scratch-Off Game
Sponsor
More Annuity News

Health/Employee Benefits News

  • EBRI Studies Expanding Pre-Deductible Coverage For Chronic Conditions
  • Most Consumers Choose To Pay Higher LTCi Premiums
  • CMS Creates More User-Friendly Medicare Website
  • Integrity Marketing Group Buys Ritter Insurance Marketing
  • Maine Powerless In Big Fight Between Its Largest Insurer And Hospital
More Health/Employee Benefits News

Property and Casualty News

  • Inflation Squeezes Homeowners, Commercial Property Insurers, Moody’s Reports
  • ‘Left With Nothing.’ Survivors Of Surfside Condo Collapse Seek More Settlement Money
  • Michigan Drivers Issued $3B In Auto Insurance Refunds
  • Hurricane Season Could Result In Higher Homeowners Insurance Rates
  • Progressive Unveils Flo’s Former Flame, Jon Hamm, In Latest Ad Campaign
More Property and Casualty News

- Presented By -

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

FEATURED OFFERS

Get Linked INN to your industry Connect with INN on LinkedIn to be first on all the news and insights that matter to your industry.

Press ReleasesAll press releases

  • OneAmerica Commits $1 Million Toward Financial Literacy
  • Transamerica Structured Index Advantage Annuity Offers Investors More Certainty with Upside Growth and Downside Protection
  • Senior Market Sales Creates First-of-Its-Kind Lead Acquisition Platform
  • Growing financial services firm Kuvare opens Des Moines office in East Village, continuing expansion in Iowa
  • BetterLife Selects iPipeline® to Digitally Transform Its Business & Better Serve Future Generations
Add your Press Release >

Topics

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Content
  • Webinars
  • Monthly Focus

Top Sections

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2022 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • Sitemap
  • AdvisorNews

Sign in with your INNsider Account

Not registered? Become an INNsider.