More than a third (37%) of parents with children younger than 18 do not have life insurance, according to a new study from Bankrate.com. And about one-third of the parents who do have life insurance have no more than $100,000 of protection.
While about 6 in 10 Americans say they own life insurance, nearly half of them have insufficient coverage to address the financial needs of their family if they were to die, according to the latestBankrate Money Pulse Survey.
“You look at this and say, ‘Boy, there are a lot of families out there that are very underinsured!’” said Brendan Bridgeland, director of the Center for Insurance Research, a nonprofit consumer organization based in Cambridge, Mass.
“These numbers mean that over 20 million households with dependent children either don’t have any life insurance or don’t have nearly enough,” said Doug Whiteman, Bankrate.com’s insurance analyst.
Among the survey’s findings:
• Overall, 42% of Americans lack life insurance and about half of those who have it are covered for $100,000 or less.
• Even 1 in 4 insured people with annual household income of $75,000+ have $100,000 or less in coverage.
• 11% of women and 5% of men say they have life insurance, but they don’t know how much.
“There are many rules of thumb regarding how much life insurance is enough,” Whiteman said. “Ultimately, it’s a personal decision that’s based on a range of factors including your debts, mortgage, potential college costs for your children (that’s if you have any), and likely burial expenses.”
The survey was conducted by Princeton Survey Research Associates International (PSRAI).