Life Insurance: Going Without Might Cost You

As the economy struggles, nearly a third of U.S. households are going without life insurance coverage – which may be a bad idea.

About 35 million U.S. households do not have life insurance, according to industry-funded research firm LIMRA.
That’s up from 24 million households, or 22% of the economy, without coverage in 2004. It also represents the highest percentage in more than four decades. Why are people going without life insurance?  Half of the respondents to the latest LIMRA survey said they needed more life insurance but just can’t afford it right now. Another reason for declining life insurance is less availability. Employers have scaled back or eliminated coverage. This has forced individuals to buy their own life insurance. However, many people, it appears, just don’t know where to go to get help doing so.

The number of company-affiliated life insurance agents has dropped by nearly one-third since the 1970s, according to LIMRA. And, the LIMRA study notes, almost eight in 10 households don’t have an insurance agent.  As a result, the percentage of households with life insurance outside of an employer-sponsored plan dropped from 50% in 2004 to 44% today.

But going without life insurance isn’t a good idea for many people – namely those who have dependents.

For example, among households with children under 18, four in 10 survey respondents said they would have trouble meeting immediate living expenses if the primary wage earner died. Three in 10 would have trouble after several months.

Your advisor can help you determine if you need life insurance – and if you do, help you purchase a policy that’s right for you based on benefits and affordability.