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The Hidden Crisis: The Life Insurance Coverage Gap

You know that life insurance can help protect your family with guaranteed benefits, if you are no longer there to support them.

But do you know if you have enough life insurance to ensure your family’s long-term stability and security in your absence?

NEARLY 1 IN 2 FAMILIES don’t have enough life insurance to adequately protect their loved ones. The average gap is $400,000

A recent study of more than 4,000 households by LIMRA found that almost one in two American families own significantly less life insurance than they actually need (1).

For those earning $100,000 or more a year, the average gap between the amount owned and amount needed, was a whooping $400,000! In fact, high earners face the largest coverage gap of all households (2).

Reasons for the Gap

  1. An old group policy: It could be that you received a group policy from your employer years ago and you haven’t reviewed it since then.

  2. A policy that’s out of date: It might be that you purchased life insurance on your own when your salary and expenses were much lower.

  3. A policy that doesn’t reflect your situation: As time has passed, your policy hasn’t kept up with your new salary, new lifestyle, larger mortgage, or looming college expenses.

Our firm offers life insurance policy review services for families, businesses and advisors to understand the policies that are in place.

Life insurance provides financial security for your business as well.

If you’re a successful business owner, you might have a similar gap in the amount of life insurance you carry on key employees.

Without enough insurance to fund the buy-out of a deceased partner’s ownership stake, you could be forced to liquidate the business.


Protect The Things You Care About Most By Making Sure You Have Enough Coverage.

Whatever your situation may be, having the right amount of life insurance coverage today for the people who matter most, will help ensure the stability and continuity of your family and your business, now and in the future.

1.LIMRA: Turn Up the Volume: $12 Trillion Sound Opportunities (LIMRA,2017)

2.”The Mismatch between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Health and Retirement Study,” by B.D. Bernheim, L. Forni, J. Gokhale, and L.J. Kotlikoff, American Economic Review, 93(1), 354-365. (2003).

This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. To determine what is appropriate for you, schedule a time to connect. Information obtained from third-party sources are believed to be reliable but not guaranteed.

The tax and legal references attached herein are designed to provide accurate and authoritative information with regard to the subject matter covered and are provided with the understanding that neither TRC Financial, nor M Financial are engaged in rendering tax, legal, or actuarial services. If tax, legal, or actuarial advice is required, you should consult your accountant, attorney, or actuary. Neither TRC Financial, nor M Financial should replace those advisors.


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