Americans Hold On To Life Insurance Coverage Despite Bad Economy

With the U.S. economy adversely affecting life insurance sales, many Americans are sticking with their current policies or streamlining in order to hold on to the important protections while the financial environment remains shaky.

According to a survey taken in August by the First Command Financial Behaviors Index, just 4% of U.S. consumers have reported any changes to personal life insurance coverage due to the economy. Of those that did make changes, 42% increased their coverage, 29% decreased coverage, and 17% got rid of theirs.

First Command CEO Scott Spiker made this comment: “We are encouraged and relieved to see that middle-class consumers are not reacting to the economic turmoil by sacrificing their life insurance coverage.”

He added, “Canceling policies to save money during tough times is a move fraught with financial peril. Life insurance serves as a safety net that catches a family when tragedy strikes.”

The group’s survey also showed that approximately 3% of the respondents reported that their employer has adjusted their life insurance coverage provided at work because of economic condition.

Of those polled, 70% noted decreases. About 34% of the respondents were satisfied with the present life insurance coverage. This number was down from 40% recorded back in February of 2008. A number of other factors such as the use of financial planners also contributed to the percentages recorded in the survey.

The survey issued by First Command was a part of the that group’s September observance of Life Insurance Awareness Month, an occasion instituted by the LIFE Foundation, which was seeking to address concern about the increasing numbers of Americans who currently lack life insurance. According to one group’s estimates, 68 million adults have no coverage whatsoever, while the rest of far less coverage than what is recommended by insurance experts.

Life insurance is a comfort for many U.S. consumers. It engenders more confidence in their financial outlook as well. The sense of security one feels when they have enough protection to take care of all debt and family security is directly linked the quality of life insurance coverage one has.