Approximately 100 million Americans, nearly half of the adult population, have no life insurance coverage. Coverage rates have been in decline since 1960 and are now near a 50-year low.  But there is an opportunity to help close this gap since, according to LIMRA, approximately half of U.S. households believe they need more life insurance. Even more encouraging is the fact that the majority of U.S. consumers still prefer to buy life insurance face-to-face through an advisor or agent.

Here’s what you can do..

Address perceived obstacles

  1. It is too expensive 65%
  2. I have other financial priorities right now 61%
  3. I have as much as I need or I don’t need any 55%

Let’s examine each of these…


Consumers perceive that life insurance coverage costs two to four times more than it actually does. You can help to dispel this misinformation by delivering level term quotes to both existing clients and prospects.

Other Priorities

Many consumers feel their budgets restricted by increasing cost of living. This reason was the most cited (65%) among financial priorities which prevent consumers from purchasing life insurance, followed by: non-essential expenses such as Internet service and cell phone service (49%), accumulated debt (38%), saving for retirement (37%), increasing savings (37%), and health expenses (30%).

These statistics suggest that you may need to focus on two goals: 1) understand a household’s total spending picture; and 2) position life insurance higher on the spectrum of spending needs. Have a conversation with your clients and prospects about their budget so that you can help them to find the money they need to pay premiums. Check out Life Lessons for a fact finder and a series of helpful budgeting worksheets.

Already have enough coverage

In a study called Closing the Life Insurance Gap, LIMRA documented that U.S. households have $11.0 trillion of existing life insurance coverage, and another $15.3 trillion of needs not covered by existing financial resources or life insurance. In other words, America is under-insured (for life) by $15.3 trillion!

The best way you can help to close the gap is to bring this giant number down is through a basic needs analysis.

LIMRA assumes that households need coverage equal to:

  • Seven years of pre-tax household income multiplied by 75% (assuming 25% for taxes)
  • Plus outstanding debts and estimated funeral costs of $15,000 per adult
  • Minus existing resources and existing life insurance face amount

Among households that have existing life insurance coverage, only 39% have enough under this method.

Our needs analysis and fact finder will help you ask the right questions about income, debts, resources and coverage, helping you gain additional information about your client’s needs.

One household at a time….

By addressing obstacles one household at a time, you will help clients and prospects in your market see that life insurance is affordable and essential within a comprehensive planning process.

Source: LIMRA, and Ashley Durham. 2015 Insurance Barometer Study. 2015.

Actual premiums required for life insurance applied for will ultimately depend on the underwriting process which includes health and non-health related factors. Life insurance is subject to exclusions, limitations, and terms for keeping it in force. All guarantees are based solely on the claims-paying ability of the issuing life insurance company.