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Caregivers Need To Take Care Of Their Own Protection First

Over the past several decades, advances in medicine and better living conditions have helped more Americans live longer. According to a LIMRA analysis, a 65-year-old couple has a 50% chance of both members living past age 80. But older Americans increasingly need caregiver help — and often it falls on family members to provide that care.

A recent LIMRA study finds 36% of adults (ages 18-64) say they have been or currently are unpaid family caregivers. That’s 77 million Americans. Among these, 43 million currently provide care to a family member.

Life Insurance

Despite the important and valuable service caregivers provide, only 41% of current caregivers own life insurance. When you consider the cost of hiring someone to replace a caregiver if they should die, it is worrisome that more caregivers don’t own life insurance. The benchmark rate of life insurance ownership in the U.S. for this age group equals 58%, which is 19 points above the mark for caregivers, according to the LIMRA/Life Happens 2018 Insurance Barometer.

Yet, LIMRA’s study of unpaid family caregivers clearly shows these consumers understand how important it is to own life insurance. Seventy-eight percent say they should have life insurance. This is a 37-point gap from their actual ownership rate, which suggests more than 28 million caregivers want to acquire coverage.

The top reasons current caregivers give for not purchasing life insurance are:

  • Too expensive – 45%
  • Other financial priorities – 27%
  • Haven’t gotten around to it – 23%

These are very similar to responses the general population gave. But we know that the majority of Americans overestimate the cost of life insurance.

According to the 2019 Insurance Barometer Study, consumers, on average, believe the cost of life insurance is three times its actual cost. Life insurance marketers have an opportunity to help these consumers by educating them on the actual cost of coverage and the risks that care recipients face if their family caregivers don’t have adequate life coverage.

Disability Insurance

Becoming disabled is another significant risk for caregivers, particularly if they are also wage earners. A disability is even more likely than a premature death, and it puts both the caregiver and care recipient at risk. Most consumers do not understand the risk of a disability. More than 25% of those who are 20 years old today will be out of work for a year or more due to a disability before they reach retirement age, according to the SocialSecurity Administration. Only 17% of caregivers own disability insurance. This is five percentage points lower than the general population of working adults. The gap between attitudes and behavior regarding DI is even larger. The data in the chart to the right suggests a 62-point gap between caregivers who “should” own DI coverage and those who actually own it.

In all, 68 million caregivers need DI coverage. This includes 63 million who do not own DI, and 5 million who do not own enough coverage.


The caregiver persona is a powerful association for many working-age adults. It characterizes a stage of life to which many will dedicate years.

During this time period, the presence of care recipients creates a persuasive need for life, disability and long-term care coverages.
While displaying sensitivity to the demands on caregivers, advisors and companies can focus on helping caregivers understand the value of life insurance and disability products and the protection they provide for their families’ financial well-being.

James T. Scanlon, MS, HIA, is a senior research director of insurance research for LIMRA, focusing on insurance product and service marketing. Jim may be contacted at [email protected] .

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