In 2004, financial services
organisation LIMRA estimated that life insurance sales in the US
would increase by $9.5trn if the 48m then underinsured households
bought the amount of life coverage they needed. In the wake of the
financial crisis and a slump in life insurance ownership, LIMRA now
estimates that there are 58m underinsured households representing a
sales potential of up to $17.5trn.
Cheryl Retzloff, senior
research director at LIMRA’s market research unit, emphasised that
the underinsured life insurance market offers “tremendous
opportunity”. This is particularly true of the 35m underinsured
middle market households in the US of which, she said, a recent
survey by LIMRA has revealed that half “might be ready” to buy life
insurance in 2012.
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She stressed that the biggest
challenge is not getting middle-market households to understand
that they need life insurance.
“These [middle-market]
consumers need help to decide what type to buy, how much coverage
they need and how life insurance can play an important role in
their overall financial security,” Retzloff said.
There is a long way to go.
LIMRA reports that in the first half of 2011 total individual life
insurance new annualised premium increased by 4% compared with the
first half of 2010.
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