As the coronavirus pandemic continues to impact everything from the economy to daily life, worries over personal safety have driven 83 million Americans to consider buying life insurance or increasing their life insurance coverage, according to a new survey from ValuePenguin.com by LendingTree.
- 1 in 4 Americans say COVID-19 has increased their interest in life insurance, with men more likely to agree than women. 38% of men said they want to buy life insurance or increase their life insurance coverage, compared to just 14% of women.
- Most people already have some life insurance, but many aren’t sure what it actually does. While 65% of all respondents said they already had life insurance in place, 40% claimed they were not very familiar with, or did not know what life insurance does.
- Over 30% of Americans don’t know how much life insurance they need. While the appropriate amount of coverage changes for every person based on their financial needs, most respondents came in with estimates that were too low for a typical scenario. Only 10% cited the common rule of thumb that coverage should be equal to 10 times their annual salary.
- How much does life insurance cost and how much coverage should one purchase? A $500,000 term life policy lasting 20 years would cost an average of $30 per month for a 35-year-old nonsmoker in good health. Even the conventional rule of thumb of 5 to 10 times their annual salary isn’t a very accurate estimate of a person’s life insurance needs.
“Ultimately, the amount of coverage you have should be enough to meet all of your future financial obligations, minus the assets that would be liquidated on your passing,” said Chris Moon, Insurance Product Manager at ValuePenguin.com. He added, “While families are bound to cut back spending and adjust in such unfortunate cases, calculating your family’s needs today and using that number to gauge your life insurance coverage can minimize the financial difficulty they would face.”