This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Insurance Misinformation Is Rampant, Company Survey Says

Stocks in this article: GNW

NEW YORK ( TheStreet) -- Ask a garden-variety consumer if he or she understands their life insurance policy and you might get some hemming and hawing. Eventually that consumer will likely say they know enough to sleep well at night.

But the image of the well-informed life insurance consumer is a myth, says Genworth Financial (GNW), the Richmond, Va.-based financial services giant.

In a report from the group, Genworth says consumers may think they get the ins-and-outs of life insurance coverage, but the reality is they don't. In fact, "misinformation" is so rampant that most U.S. life insurance consumers wind up getting "inadequate" coverage.

For example, the report notes that consumers believe life insurance costs three times as much as it actually does, leading insurance buyers to aim lower financially and not buy the coverage they and their families actually need.

"Consumers often believe life insurance costs nearly three times its actual price, and this is a major contributor to the large coverage gap we're seeing," says Brian Bulakites, national sales manager for life insurance at Genworth.

Also, the larger the family, the more likely there will be "coverage gaps," the report says. Larger families tend to have lower incomes and have higher expenses associated with raising children, and once the parents (or parent) believes life insurance is more expensive that it actually is, they wind up buying cheaper coverage that can cost that family financially in a big way.

Another "challenge" area is female consumers. The study says that 43% of married mothers don't have any life insurance at all.

Then there are unmarried parents. Genworth says that 59% of unmarried mothers are without life insurance, and 69% of unmarried fathers, compared to 34% of married father who lack insurance.

Lastly, the timing on buying life insurance is not as cut and dried as consumers may think.

Genworth says a big myth exists among consumers who believe the best time to buy life insurance is when one is in optimal health. That makes sense, right?

Maybe not, says the study.

"Affordable life insurance coverage is becoming more accessible for those who have been diagnosed with certain health conditions, thanks to advanced underwriting practices," says Genworth in its report, Getting Over the Gap: Insights on Life Insurance Coverage in the U.S. "In fact, many commonly diagnosed health issues -- like asthma and depression -- are no longer barriers to receiving preferred rates on life insurance, which is helping financial professionals close the gap for this group."

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs