August 18, 2025

A recent analysis of life insurance coverage gaps reveals that most  Americans are underinsured, regardless of income, with coverage falling significantly below the suggested 10x income rule model. The study was conducted by Hayden LaPiana, a graduate student at Georgia Tech, in collaboration with  MIB, the life insurance industry’s most trusted and secure partner for data-driven insights and digital services,  leveraging unique de-identified data on life insurance application activity from the MIB Aptivity Service, and  supplementary public data sources, to assess coverage gaps and identify underserved populations.  

The study uncovers an insurance paradox: higher income doesn’t guarantee adequate coverage. While no segment of  the population reaches the suggested insurance threshold of 10x income, the highest earners had the lowest  insurance adequacy results. Behavioral drivers like geography, psychology, and life circumstances were found to be  the strongest predictor of coverage patterns, rather than income. The study also underscores geographic disparities,  with the Northeast and Northwest consistently outperforming the Southeast across multiple indicators of financial  behavior and insurance adequacy.  

“My analysis uncovered three distinct groups, each with unique characteristics: high-income earners with low  coverage, low-income individuals with strong coverage, and disengaged respondents caught in indecision. These  segments tell a powerful story — insurance adequacy is shaped more by mindset and behavior than by income  alone,” said LaPiana.  

The research was conducted by starting with de-identified insurance application data from MIB that captures age  bands, gender, face amount bands, postal code, and application count, and augmented with key features from the  FINRA National Financial Capability Study, a nationwide survey designed to assess overall financial capability, and the Federal Reserve Survey of Consumer Finances, capturing extensive financial information. The MIB data is based on  application information submitted to MIB by its member insurance carrier companies as part of the application  process for individual life insurance.  

“This study is exemplary of the power that MIB’s unique and comprehensive data can be leveraged to reveal insights  that provide significant value to the life insurance industry,” said Trey Reynolds, EVP Strategy & New Business  Development at MIB. “MIB is a trusted host of the life insurance industry’s data – and we developed the Aptivity data and analytics service for the purpose of harnessing that data for the benefit of the industry, helping our members use  it for competitive benchmarking, sales forecasting or product development, while also applying it to studies that  analyze topics of key interest to the industry.”  

The full study can be found on the MIBGroup.com website here.