Misconceptions over the
cost of life insurance may be preventing many consumers in the US
from getting the coverage they need, according to a new
report.

The 2012 Insurance
Barometer Study, conducted by the Life and Health
InsuranceFoundation for Education (LIFE), and
professionaldevelopment organisation LIMRA,found that consumers in
the US believe lifeinsurance costs nearly three times the
actualprice.

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Survey respondents were
asked to estimate the annual cost of a 20-year, $250,000,
level-term life policy for a healthy 30-year old
consumer.

The actual cost is
approximately $150, but the report said consumers in the US
estimated the cost at $400.

Younger adults, who are
most likely to qualify for preferred pricing, overestimated the
cost by nearly seven times the actual amount.

Marvin H Feldman,
president and CEO of the LIFE Foundation, said given that the cost
of basic term life insurance has fallen by about 50% over the past
10 years, the industry needs to do more to help educate people
about the true cost of protecting their families and loved
ones.

Gender
gap

The survey also found
that more than one in three women believe they do not have enough
life insurance coverage, compared to 29% of men.

Among survey respondents
aged 25 and younger, 41% say they need more coverage.

Meanwhile, of consumers
aged 25 to 44 – the prime insurance-buying years – 36% believe they
need more life insurance.

Key minority groups are
also more likely to feel underinsured, with 42% of African
Americans and 37% of Hispanics saying they need more life
insurance, compared to 32% of total population, noted the
report.

Robert Kerzner, CEO of
LIMRA, said: “We created the barometer study with the LIFE
Foundation to provide an annual snapshot of evolving consumer
attitudes about a wide range of insurance-related topics, and our
hope is that the broader industry will use these insights to help
address the crisis of underinsurance this country
faces.”