Life Insurance Policies Drop to Lowest Levels in Half a Century

According to research conducted by LIMRA, an insurance industry group, the level of households in the United States with life insurance coverage now stands at its lowest level in half a century, with just 44 percent carrying individual policies.

At those levels, approximately 11 million American households with a child under the age of 18 have no protection in the event of an untimely death of a parent, with 40 percent saying the recession has forced them to choose between insurance and other expenses.

At the same time, however, 40 percent also say that if the principle breadwinner were to die without warning, they would be hard pressed to meet expenses.

The trend is particularly disturbing as life insurance rates are currently low, with ING estimating that a healthy 35-year-old man can carry a $500,000 twenty year term policy for approximately $25 a month.

The fact that life insurance is not mandatory allows people to procrastinate in investigating the coverage, according to experts, and the current low levels are complicated by a decrease in personal insurance agents and brokers. Eighty percent of families surveyed say they have no relationship with an insurance professional.

Most consumers fails to put the pieces together that a life insurance policy is not about the person on whom the coverage is written, but on those they wish to see cared for and protected in the event of their death. Additionally, the time to get affordable life insurance coverage is when the person is young and healthy, not after potential health problems begin to present themselves.

Experts say that in terms of long-range consequences, the current dip in life insurance coverage could be one of the most serious consequences of these hard economic times for future generations.