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Prepared and Protected

How life insurance supports financial wellness for those you love
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Guardian 12th Annual Workplace Benefits Study

What percentage of Americans have life insurance?

For the past five decades, life insurance trends have shown a steady decline in ownership rates among American adults, with 83% having life insurance coverage in 1975, and 52% in 2023.1 Coverage amounts are declining as well. In the 1990s, group life insurance surpassed individual life insurance as the primary distribution channel for US employees. The shift has contributed to lower coverage levels, as group plans tend to offer smaller amounts.

Understanding life insurance trends to protect your family

While employer-sponsored coverage provides a solid foundation for a household’s financial protection, many households will want to build upon this bedrock. This study examines trends in life insurance ownership, the financial impact of having coverage when tragedy strikes, and the role of life insurance in protecting a household’s financial wellness.

Life insurance data reveal inconsistent attitudes toward ownership

Competing financial priorities, misconceptions around adequate coverage amounts, and confusion around the cost of life insurance can lead to inconsistent attitudes toward life insurance ownership. Over 60% of American workers feel undereducated about their employer-sponsored benefits in general and are unclear on how to use them — and 40% of people report being uncomfortable having end-of-life discussions with family members.2

Inconsistent attitudes toward life insurance - image description available below image

Eighty percent of Americans are concerned about being financially prepared in the event of a premature death, yet almost 30% do not own life insurance.

It is the most vulnerable workers who have the least amount of life insurance coverage

Guardian’s Workplace Benefits Study shows that overall life insurance coverage for American workers has been holding steady around the 70% mark for the past 12 years, with the latest (2023) life insurance statistics coming in at 71%. While this paints a sunnier picture for American workers than the general population, it is important to note that vulnerable workers like single parents, caregivers, and lower-income households tend to have lower rates of life insurance ownership.

Life insurance ownership by household - image description available below image

Life insurance industry recommended coverage amounts

The amount of life insurance coverage someone needs depends on a variety of factors, including marital and health status, financial dependents, household income, assets, and debt. Industry guidelines often suggest that individuals should have enough life insurance to replace, at minimum, 7 to 10 times their annual salary. More conservative guidance suggests even higher levels of coverage up to 20 times a worker's annual salary.3 Regardless, workers are not meeting the minimum life insurance industry recommendations.

Life insurance ownership amounts by salary multiples - image description available below image

Nine out of 10 workers have insufficient life coverage, yet only 36% believe they are underinsured, according to life insurance statistics. And many who believe they have adequate coverage do not. More than half (53%) of those with life insurance equal to or less than their annual salary believe that they have enough coverage.

Working Americans have, on average, between 2 and 4 times their salary in life insurance coverage, which is well below industry guidelines.

Household financial impact after the loss of a primary wage earner

The road to financial recovery from the premature death of a primary wage earner can be long and difficult. Among households that experienced the premature death of a main wage earner, 62% of surviving spouses or partners feel that the loss had either a devastating or major impact on their family's financial situation.

Extent of financial impact among households that experienced the premature death of a main earner - image description available below image

Three-quarters (76%) of workers who lost their spouse or partner five or more years ago still feel their finances have not yet fully recovered — and that number increases to 83% for 3 to 4 years prior.

Group life insurance provides an important foundation for coverage, but most workers need more

Among employers who offer life insurance, 52% offer group coverage of only one times the employee's annual salary or less. And one-third offer life insurance benefits that cover two times an employee's annual salary. Only 2% offer a higher salary multiple than two-times salary, and 6% offer a flat rate, typically either $10,000 or $20,000.

Stay at the forefront

Looking for more research, resources, and insights? Visit Guardian Edge to stay informed of the latest industry trends.

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12023 Insurance Barometer Study Report 1: Life Insurance in Focus, LIMRA (account required), 2023

2 Owning life insurance provides a clear path to financial security, Life Happens, 2022 

3Life Insurance Advice from Financial Experts, Bestow, 2021

Unless otherwise noted, all data are sourced from Guardian’s 12th Annual Workplace Benefits Study, 2023. The Guardian Life Insurance Company of America (Guardian), New York, New York. GUARDIAN® is a registered trademark of The Guardian Life Insurance Company of America.Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice.

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