Households with Life Insurance Hits Lowest Level in 50 Years!
  By Sandra Block, USA TODAY

 

 

 

 

The percentage of U.S. households with life insurance coverage is at its lowest in 50 years, leaving millions of families without a safety net, industry experts say.

 

 

 

 

Only 44% of households have an individual life insurance policy, and 30% have no individual or employer-provided life insurance, according to a recent survey by LIMRA, an industry-sponsored group.

Some 11 million households with children younger than 18 — viewed as families with the greatest need for coverage — have no life insurance.

 

 

 

 

The drop in insurance coverage comes at a time when premiums for term life insurance are significantly lower than they were a decade ago. Behind the decline:

• The economic downturn. More than 40% of families said they haven't purchased life insurance because they have other financial priorities.

             At the same time, 40% of families with children under age 
             18 said they would have immediate trouble paying expenses 
             if the primary breadwinner died.

• Procrastination. Unlike auto and mortgage insurance — which are typically mandatory for home and car owners — life insurance is a voluntary purchase, that causes people to put off buying it.

             Procrastination can backfire, because young, healthy people
             can usually get the least expensive premiums. A lot of people 
             really overlook the whole need (for insurance) until they have
             a health condition, and then life insurance prices are out of 
             reach for them.

• Fewer insurance agents. Nearly 80% of families don't have a  personal life insurance agent or broker, according to LIMRA. The decline in premiums for term life insurance has made it  more difficult for agents who sell the policies to make enough  money to cover their expense.

 

 

 

 

In 2010, there were 184,873 "affiliated agents"— insurance agents who primarily or exclusively sell one insurance company's products — down from more than 246,000 two decades ago, according to LIMRA. And life insurance agents who have stayed in the business are increasingly selling permanent life insurance to affluent families. Permanent life insurance has a savings component and doesn't expire, but it is more expensive than term insurance.

 

 

 

 

Insurance companies are adopting several strategies to reach out to middle-income families who don't have a life insurance agent.

 

 

 

Most insurance is still purchased "face to face from a live person at the kitchen table."

  

 

 

 

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