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Many Americans fail to purchase the life insurance their family needs

By Maryalene LaPonsie on January 27th, 2012

Most Americans feel a responsibility to provide financially for their families in the event they die, according to a survey conducted by MetLife. Despite this sense of obligation, 41 percent of survey respondents do not feel they have adequate life insurance coverage.

Meanwhile, a separate report from industry group LIMRA may offer a clue as to why so many people are underinsured. Only 39 percent of American households recall having the opportunity to buy coverage in the past two years.

Meeting family obligations

The MetLife findings are part of a larger survey that considered the attitudes of different generations in regard to their financial obligations to their families. Overall, 78 percent of respondents across all generations felt an obligation to provide support for a surviving spouse.

In addition, more than half say money should be available to support minor children. Of those who believe children should be supported, 55 percent say the money should last until the children are at least partway through college.

Term life insurance and whole life insurance are two common ways to provide support for spouses and children. But many poll respondents believe they do not currently have enough coverage to ensure their family's financial security. Baby boomers were most confident in their coverage, with 72 percent saying they had enough life insurance. Meanwhile, only 60 percent of Generation X respondents could say the same.

More shopping for life insurance quotes

For some households, inadequate coverage may be the result of a perceived lack of opportunities to purchase life insurance. A LIMRA study found just 39 percent of Americans recall having the opportunity to purchase life insurance during the past two years.

At the same time, the number of individuals shopping for life insurance has doubled since 2003. During that year, 11 percent of households actively looked for life insurance. In 2011, the number jumped to 22 percent. Despite an increase in the number of families shopping for coverage, fewer are buying. In 2011, 54 percent of shoppers actually purchased a policy, compared to 70 percent in 2003.

According to LIMRA, 36 percent of shoppers looking for affordable life insurance online make a purchase, compared to 74 percent of those meeting with a sales representative.

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