A pair of national surveys looking at life insurance protection conducted before and after the Great Recession finds Americans' gap in protection has worsened considerably, according to
In a release,
Americans say they want enough life insurance, on average, to cover expenses for at least 14 years after the loss of a breadwinner, but in reality only have three years of protection in place.
The research also found substantial variation in life insurance coverage across different regions of the country.
"My question is: what happens in the fourth year? If you pass away, your paycheck goes away and your family is still in need of income," said
Before the Great Recession took solid hold in 2008, Americans reported a median shortfall between their life insurance coverage and their self-described financial needs of
The gap has grown by 11 percent since 2008, putting Americans in even greater danger of missing widely-held goals such as paying off a mortgage, funding a four-year college education or financing a secure retirement because they lack adequate life insurance protection.
The Life Insurance Gap survey examined the financial planning attitudes and behaviors of 1,000 Americans age 25 and over with dependents. It focused on how much life insurance coverage they had in place and what they want their life insurance policies to cover in the event of the death of the breadwinner, resulting in a self- reported gap.
The study was conducted by
"No doubt the economy has been tough on families - home values sank, the stock market got hammered, and financial assets went way down. Families are scratching for every bit of discretionary income and there is a lot of competition for their dollars. Now, sadly, we learn that five years of penny pinching and cutbacks have extended to the core safety net Americans need to protect their families. We believe this is one area that shouldn't be ignored," said Blunt. "We hope this survey begins a discussion at kitchen tables across the country and that families do what they can to build up their financial protection. Even if you can't afford the ideal coverage for your needs, something is always better than nothing."
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