Jul 2004 CET Millions of consumers around the world lack adequate life insurance protection, according to a Swiss Re sigma study released today. "Mortality protection: the core of life" identifies significant shortfalls in the amount of mortality cover purchased when compared with consumers' real protection needs. If the protection gap were to be filled, the average amount a family spends on life insurance premiums each year would need to increase by USD 98 to USD 444, depending on the country. Christian Stöckli, a senior actuary at Swiss Re and co-author of the study commented: "One of the most striking findings of the sigma study is that each country we examined has a substantial mortality protection gap, despite many differences in how national markets operate."
Significant life assurance protection gaps
Many families are either
uninsured or inadequately insured against the death of their primary earners. A
measure of this shortfall is the life assurance protection gap - the difference
between the resources needed and the resources that would be available to
maintain a family's current living standard after the death of its primary
earner. The sigma study estimates the size of the mortality protection gaps of
five important markets -
Life assurance protection gap, selected countries
Developments in mortality protection
In recent years term life assurance
has become the preferred form of mortality coverage as many markets have
witnessed a shift in consumer tastes away from products that combine savings
with mortality protection. Term markets have grown rapidly, but differ widely
with respect to size and degree of product development across countries.
Mortality coverage per capita from individual term products varies from a high
of USD 40 544 in the
The study concludes by discussing how insurers, governments and employers can work towards closing the protection gap. Greater workplace education could be complemented by insurance industry initiatives and government incentives. Clarifying how much coverage is needed and how much support is available from social security, existing life insurance coverage and available assets will help each family evaluate its own protection gap. Because governments must sometimes intervene to provide welfare, it may be prudent for them to offer employers and workers tax incentives to encourage adequate mortality coverage.
How to obtain a copy of this sigma study:
The English, German, French, Italian and Spanish versions of the sigma study "Mortality protection: the core of life" are available electronically on our sigma section http://www.swissre.com. Printed editions of sigma No 4/2004 can now be ordered: English and German versions are now available, those in French, Italian, Spanish, Chinese and Japanese will be available soon. Please send your orders, complete with your full postal address, to: E-mail: firstname.lastname@example.org Back to Top