By Pete Miller
October 28th, 2010
The current economic downturn may be causing consumers to drop their life insurance coverage, according to recent reports.
The Trends in Life Insurance Ownership study, conducted every six years by LIMRA, found only 44 percent of U.S. households reported having individual life insurance in August.
Today, 30 percent of households – 35 million – have no life insurance coverage, compared with 22 percent of households in 2004. Among households with children under 18, which arguably have the greatest need for life insurance, 11 million have no coverage.
Unlike home insurance and auto insurance, life insurance is not a legal requirement, one reason analysts say many consumers seem to be going without life insurance coverage.
"The need for life insurance is now more than ever before," says Byron Udell, founder and CEO of AccuQuote. "Especially if you have a family to support financially."
Reinstating coverage after defaulting on life insurance payments can also be difficult, as it is not often allowed by insurers. Of the companies that will allow a consumer to resume coverage, most require the insured to pay back the total sum of the missed premiums.
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