Too few American families have been adequately covered by life insurance for too long, and a coalition of trade associations plans to do something about it this year.
The group launched Help Protect Our Families on Feb. 1 with an outreach campaign to close the gap in under- and uninsured households. About 60 million households fall into that group, with an average coverage gap of $200,000, amounting to a $12 trillion opportunity for the industry.
LL Global, the parent organization of LIMRA and LOMA, the American Council of Life Insurers, Finseca, Life Happens, Million Dollar Round Table, National Association of Insurance and Financial Advisors, and National Association of Independent Life Brokerage Agencies are pulling together for the yearlong effort.
Although the coverage gap has been an issue for several decades, it has accelerated over the past few years. In 2020, just 54% of Americans had life insurance coverage, a significant decline from 63% just a decade ago, according to research by LIMRA and Life Happens. Even those who have life insurance may not have enough coverage to adequately support their families.
The seven trade associations plan to leverage their expertise and resources to develop and share consumer insights and industry best practices that will help carriers and financial security professionals reach those families that are at risk of not having proper coverage.
One of the reasons to act now is the increase in consumer awareness during the COVID-19 pandemic. In 2020, one-third of Americans (32%) said COVID-19 was the primary reason they began shopping for life insurance.
Also, according to LIMRA and Life Happens research:
» Seven in 10 Americans agree that the pandemic has been a wake-up call to reevaluate their long-term financial goals.
» Three in 10 Americans say they are more likely to buy life insurance due to COVID-19, with seven in 10 saying they want to increase what they already have.
» Three in 10 Americans have discussed life insurance coverage with their family during the pandemic.
Consumers are ready to talk to an agent, with 41% saying they want to work with an agent to buy coverage.
The coverage gap might actually be a knowledge gap. More than half of consumers said they haven’t bought because they don’t know what they need. In fact, 34% of Americans said they don’t understand the basic concepts about life insurance.
Millennials have said they are interested in insurance, but 52% said they haven’t bought because no one has approached them. More than a third (35 percent) of married couples with dependent children want to speak with a financial professional about their life insurance needs.
Coalition members have not specified the full plan as of the rollout, but they said that agents and advisors will be able to get informational resources from their associations’ websites. LIMRA’s section for information is www.limra.com/helpprotectourfamilies.