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June 17, 2021

Life insurance simply not a top financial priority: study

According to LIMRA research, both men and women are less likely to own life insurance than they were 10 years ago, but the declines were larger for men.

Men are now approaching the traditionally lower ownership rates of women. Thirty-nine percent of men and 43 per cent of women actually have no life insurance coverage at all.

Most notably, middle-aged (35-54) married men are typically in their highest earning years, and half are fathers. Yet, this group had double-digit decreases in the proportion owning individual life insurance from 2004-2010.

And that trend seem to be continuing. People just aren't buying the way the used to. For instance, even though one third of new parents agree they lack suffient coverage, 6 in 10 of tem don’t shop or buy life insurance within two years of the birth, according to LIMRA research.

 

Often, newlyweds, new parents and divorcees have many different financial needs competing for limited dollars.

Still, conventional wisdom was that certain life events - getting married, divorced or having a baby – were primary triggers for consumers to start looking more closely at insurance.

However, these milestones no longer seem to be prompting the majority of this group to seek the coverage they might need to protect their families, LIMRA maintains, highlighting the standard reasons to at least review a policy:

1. to pay final expenses
2. to cover children’s expenses
3. to replace a spouse’s income
4. to pay off debts
5. to buy a business partner’s shares
6. to pay off estate taxes

But who's worrying? While more than one-third of new parents and 45 per cent of newlyweds and recently divorced consumers acknowledged they probably didn't have enough life insurance, nearly two-thirds of them admitted that it simply wasn’t their top financial priority.

Do you share that view? Do you have a life insurance policy? If not, why not?

By Gordon Powers, MSN Money

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...