Workers might have life insurance policies, but the coverage is often not enough, according to Guardian Life’s report, “Protecting Those We Love: The Role of Life Insurance in Financial Wellness.”

Guardian Life surveyed 2,000 employees and 1,500 employee benefits decision-makers, and found that while the vast majority of workers say it’s important for a family’s primary wage earner to own life insurance, more than 60 percent have either no life insurance or less than industry-recommended coverage amounts.

“Life insurance ownership in the U.S. has been trending lower the past 40 years, and the average coverage amount is declining as well,” the authors write. “In the 1990s, employer-based or group life insurance surpassed individual life insurance (purchased outside the workplace) as the primary distribution channel. This contributed to lower coverage levels because group plans tend to offer smaller face amounts compared to policies available outside the workplace.”

Nearly two-thirds of employers offer group life insurance coverage of only two times annual salary or less, compared to conservative industry guidelines that suggest persons should have enough life insurance to replace at least five to seven times their annual salary.

Moreover, a third of employers offer life insurance benefits that cover just one times an employee’s annual salary. Another one in five offer a flat amount of coverage, typically either $10,000 or $20,000.

“Workers who own individual life insurance are twice as likely to have recommended coverage levels compared to those with only employer-sponsored coverage,” the authors write. “Among working adults with only group life insurance, one in four have coverage equal to one times their annual salary or less.”

On average, just 15 percent of those with only group life insurance have the recommended level of coverage, compared to 32 percent of those who own individual policies purchased outside the workplace.

Employers should help their workers “protect their family’s financial future” by addressing workforce life insurance coverage, according to the report.

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