The Ages of Man (Image: Wikimedia Commons Public Domain)
Time is having the expectedÂ effect on U.S. consumersâ€™ life insurance coverage gap: increasing the size of the coverage gap for maturing Millennials â€” and narrowing theÂ gap for members of the Generation X and Baby Boom generations.
New York Life Insurance Company sized up consumersâ€™ coverageÂ needs by surveying U.S. adults with spouses or financial dependents, and with an annual household income of at least $50,000. The company also commissioned a similar survey in 2013.
The median life insurance gap for Millennials increased to 78% of $452,000 in self-reported coverageÂ needs this year, from a median gap of 65% of in 2013.
The typical Millennial has just $100,000 in life insurance coverage and faces a $352,000 coverage gap.
(Related:Â Coverage Gap Among Gen Xers Has Widened)
For members of Generation X, the median gap fell to 48% of $525,000 in coverageÂ needs, from 63% five years ago.
For Baby Boomers, the median gap fell to 37% of $300,000 in coverageÂ needs, from 57%.
New York Life hired outside firms to conduct both surveys, through online survey systems.
The 2018 survey team createdÂ a sample of 1,738 adults ages 25 through 70.Â The 2013 survey team took in responses from 1,004 adultsÂ ages 25 and older.
For both surveys, New York Life used the Pew Centerâ€™s generation definitions.
The Pew CenterÂ classifies consumers as follows:
People often buy life insurance to provide death benefits for spouses, children and other dependents.
People also may buy life insurance partly because they want to create a safe, long-lasting savings vehicle, to pay for college expenses,Â retirement expenses, long-term care needs or other needs.
When New York Life conducted its survey, it asked about the participantsâ€™ living benefits needs as well as their death benefit needs.
â€” ReadÂ New York Life Prices Coverage Gap,Â on ThinkAdvisor.