Which Low‐ and Moderate‐Income Families Purchase Life Insurance?

Abstract

The primary reason for buying life insurance is to provide financial protection for family members in case of the unexpected death of the wage earner. The two major types of life insurance are term and cash‐value insurance. Term is believed to be the least expensive. This study examined ownership of life insurance among families with a respondent between the age of 24 and 66 and with incomes below $80,000. About one‐third of the sample of 454 respondents had purchased life insurance on either the respondent or spouse/partner. Although there were some differences in predicting term versus cash‐value insurance, saving regularly and income were the two most consistent predictors of life insurance purchase.