Unmarried parents, large families, women and those with certain common health conditions face the largest gaps in life insurance coverage, according to new research by Genworth Financial, Inc.
"Getting Over the Gap: Insights on Life Insurance Coverage in the U.S." found that life insurance isn't intended to benefit the consumer. It is designed for the loved ones who rely on the person's financial support, both now and in the future.
"Consumers often believe life insurance costs nearly three times its actual price, and this is a major contributor to the large coverage gap we're seeing in these four groups," said Brian Bulakites, vice president and national sales manager for life insurance at Genworth. "We're working to close these gaps by educating consumers on the importance of a good insurance policy. By addressing these needs now, we're able to help our customers help provide the financial resources to their loved ones that will be lost upon their death."
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With tight budgets and busy schedules, life insurance may appear to be an expensive luxury for those with large families. Genworth's white paper outlines a major gap in coverage among adults who have children in their households. Not surprisingly, the pattern of either or both parents lacking life insurance is exacerbated by lower income and larger families.
The white paper also looks into the differences between married and unmarried parents. Genworth's 2012 LifeJacket Study revealed that unmarried parents are significantly less likely to have life insurance than their married counterparts, despite their clear need for coverage. The research shows that 59 percent of unmarried women are without insurance, compared with 43 percent of those who are married. For fathers, this gap is even larger, with 69 percent of unmarried fathers lacking insurance, compared with 34 percent of married fathers.
Genworth found that women have less life insurance coverage than men, although they often play an important financial role in their families. In fact, 43 percent of married mothers lack life insurance, compared with just 34 percent of married fathers. With the majority of working wives expected to earn more than their husbands in the next generation, it's important that women have the right amount and type of life insurance to help keep supporting their loved ones even after they're gone.
According to Genworth's white paper, many consumers believe the best time to buy life insurance is when they're in optimal health. But affordable life insurance coverage is becoming more accessible for those who have been diagnosed with certain health conditions, thanks to advanced underwriting practices. In fact, many commonly diagnosed health issues – like asthma and depression – are no longer barriers to receiving preferred rates on life insurance, which is helping financial professionals close the gap for this group.
It is important for all adults to review their life insurance coverage annually, even for those who don't fall into one of these categories. Genworth's white paper includes a checklist that can help consumers identify changing needs and which financial obligations should be covered by a policy. The checklist is a great starting point for determining life insurance goals and can help get the conversation started with a financial professional.
Genworth Financial, Inc. is a Fortune 500 insurance holding company dedicated to helping people secure their financial lives, families and futures.
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