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More than ever, budget-conscious American households are choosing to go without life insurance, a new study reports.

Market research firm Limra found that nearly a third of American households do not have any form of life insurance. That’s the highest rate in over forty years, and reflects a sharp downward trend in coverage over the latter part of the last decade.

As the timing of the drop would indicate, economic woes played a large role in the decline in coverage, with half of those surveyed indicating that they needed more life insurance but could not afford it. Still, those choosing to cut life insurance from their budget are playing a dangerous game: 40% of households with children under the age of 18 said that they would immediately have difficulty making ends meet if a primary wage earner died.

This willingness to forego coverage is sometimes rooted in the mistaken belief that the government will provide some form of monetary support. “People think, ‘well, there must be some government program that will kick in,’” says Amy Danise, Senior Managing Editor of “But Social Security is not going to provide the kind of income replacement that a life insurance policy would.”

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Danise goes on to note that going without life insurance for a period of time is especially problematic due to the risk that you’ll be diagnosed with a condition that makes subsequent coverage prohibitively expensive. “You can so easily become uninsurable,” she says. “Even buying some cheap term insurance for five or ten years is a smart thing to do.”

For those lacking life insurance coverage, the good news is that the cost of term life insurance has dropped in recent years, according to the Wall Street Journal. And while the study found that some employers have scaled back coverage provided in employee benefit packages, it remains a cost-effective option for those who can’t afford to purchase their own policy.

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