Top 25 U.S. Markets On Life Insurance Coverage & Adequacy of Protection.

If you live in Atlanta there is good news – you, along with your fellow residents, are among the most protected when it comes to your life insurance coverage. But if you call Los Angeles home, your life insurance coverage, along with many of your fellow residents, is most likely not sufficient to protect your families. These are among the key findings from a recent Allstate survey that ranked 25 of the most populated cities on life insurance coverage and its adequacy.

The Allstate survey, administered by LIMRA International, a marketing organization for the life insurance industry, uncovered:

— Type of life insurance policies people own (group life insurance policies offered by an employer; individual life policies purchased outside of a group life insurance policy; if respondents own both type of policies or neither);

— How many members of respondent’s household own an individual life insurance policy,

— Amount of individual life insurance coverage survey respondents have as a multiple of household income.

The survey also revealed several disparities among four U.S. regions (Northeast, Midwest, South and West).

According to Casey Sylla, president, Allstate Financial, survey respondents in all 25 cities do not have a rule of thumb recommended amount of life insurance coverage, which is seven times an individual’s income, although individual circumstances should be taken into account when estimating actual life insurance coverage needs. “We believe this survey will help us delve into the potential inadequacies of American’s life insurance coverage,” explained Sylla. “It’s important for Americans to have enough life insurance so that they, and their loved ones, can be on the path to a solid financial future.”

Top 10 Markets

According to the survey, Atlanta, which ranked in the top five on all three key measures studied: any form of life insurance, existence of an individual life insurance policy in the household and the amount of coverage times their average annual income; is the savviest metropolitan area in the country when it comes to life insurance. Nearly eight in 10 Atlantans have some form of life insurance, including approximately six in 10 who have at least one individual life insurance policy in their household.

Cities that make up the top 10 (by the 25 largest metropolitan statistical areas (MSA), include:

1.Atlanta – Sandy Springs – Marietta
2.San Diego – Carlsbad – San Marcos
3.Minneapolis – St. Paul – Bloomington
4.Denver – Aurora
5.Riverside – San Bernardino – Ontario, Calif.
6.Detroit – Warren – Livonia
7.Phoenix – Mesa – Scottsdale
8.Philadelphia – Camden – Wilmington
9.Baltimore – Towson
10.Portland – Vancouver – Beaverton, Ore.

Bottom 10 Markets

On the opposite end of the life insurance spectrum, Los Angeles ranks last of all 25 markets studied. Nearly 40 percent of respondents in Los Angeles lack any life insurance coverage (group or individual) and for those who do have life insurance, they too are not near the seven times rule of thumb amount – for example, Los Angeles residents have only 3.9 times their average income of life insurance coverage.

MSAs at the bottom of the list are:

16.Washington D.C. – Arlington – Alexandria 17.Pittsburgh 18.St. Louis 19.Dallas – Fort Worth – Arlington 20.San Francisco – Oakland – Fremont 21.Houston – Baytown – Sugar Land 22.Boston – Cambridge – Quincy 23.Seattle – Tacoma – Bellevue 24.Miami – Fort Lauderdale – Miami Beach 25.Los Angeles – Long Beach – Santa Ana

In addition, a few contradictions in survey findings emerged among cities ranked near the bottom of the survey results. For example, St. Louis ranked the highest overall as having “some” form of life insurance, yet survey respondents reported an average life insurance coverage amount of only three times their income, meaning they might be inadequately financially prepared. Similarly, Pittsburgh lands at the top of the list for reporting owning an individual life insurance policy (almost 65 percent), yet ranks lowest on the list in terms of coverage as a multiple of their income (only 3.0).

Key Differences Across the Nation

National results of the survey showed that overall, 74 percent of survey respondents have some form of life insurance, whether it’s a policy through their employer (group life insurance), or they have an individual life insurance policy they purchased outside of/ or in addition to, a group life policy. Specifically, 54 percent of all survey respondents have group life insurance through their employer, and 53 percent of all survey respondents own at least one individual life insurance policy.

Of all survey respondents, 29 percent review their life insurance coverage on a yearly basis, however 37 percent of survey respondents “never” review their life insurance coverage against their current situation.

Key Differences by Region

Broken down by four U.S. regions (Midwest, Northeast, South and West), people in the Midwest scored the highest (80 percent) on having “some” form of life insurance, and nearly 60 percent of these Midwesterners reported they have at least one individual life insurance policy in their household.

However, these same respondents carry the lowest amount of overall life insurance coverage (3.5 times their individual income).

Westerners, on the other hand, carry the highest amount of individual life insurance, with an average policy amount reported at $258,000, or 4.6 times their average income.

When People Purchase Life Insurance

Respondents rank “first full-time job” (32 percent), “having or adopting a child” (32 percent) and “getting married” (28 percent), as the most important times to purchase life insurance, according to the Allstate survey. On the other hand, only eight percent of respondents cited “purchasing a home” as the most important time to purchase life insurance, suggesting that many may not recognize the importance of being able to provide monies to family in the event of a death. Adequate life insurance coverage could help cover expenses associated with mortgage payments, taxes, as well as other needs.

Determining Adequate Life Insurance Coverage is an Ongoing Process Although many factors go into formulating how much life insurance an individual or family may need, many people are either confused by life insurance basics, underestimate their life insurance needs or too often rely solely on group life insurance policies typically associated with employment benefits.

The survey also asked whether people feel they are adequately covered. Interestingly, markets where there are a higher percentage of people with individual life insurance policies (vs. just group life insurance policies), including Pittsburgh and St. Louis, “felt” most adequately covered by their life insurance.

“There is a need for all Americans to examine all their life insurance policies and understand any limitations their policies may have,” explained Sylla. “The results of this survey should prompt Americans to consider purchasing an individual life insurance policy or updating their existing life insurance coverage so that there are no discrepancies between ‘feeling’ they’re covered versus actually being adequately covered.”