Consumers may not understand all ways life insurance can be used, and many people do not have coverage simply because no carrier has offered them a policy. Those are some of the findings from a survey conducted by Deloitte LLP.

Potential uses of life insurance overlooked

Deloitte found 23 percent of people who have not bought life insurance reported not understanding the benefits of coverage. Even among those who have purchased a policy, consumers do not appear to recognize the many ways a policy can be put to use.

A majority of those with coverage agreed a policy could help pay a family's daily living expenses, mortgage and other debt, as well as help provide for a family's long-term financial security. However, many respondents who do not have life insurance failed to see how a policy could help pay off a mortgage and other debt, or how it could provide financial stability.

In addition, a large percentage of survey respondents -- regardless of whether they had purchased a plan -- failed to see how life insurance could be used to:

  • Save for financial emergencies.
  • Increase the value of an estate.
  • Save for retirement.
  • Help pay a child's college expenses.

While all policies include a death benefit that can be used to increase the value of an estate or pay for family expenses, whole life plans build cash value that can be used by an individual during his or her lifetime as well. Consumers may not be aware they can borrow against this value for any reason, including supplementing retirement income or paying for emergency bills.

1 in 3 consumers not offered coverage

Another chief finding of the survey is that insurers fail to actively solicit customers. Many consumers do not appear to be proactively seeking life insurance quotes, and 33 percent of respondents say they do not have coverage because they have not been offered a policy.

"A significant percentage of respondents have simply not been offered coverage recently," says Rebecca C. Amoroso, vice chair and U.S. insurance leader for Deloitte, in a press statement.

Survey respondents also cited the following reasons for not purchasing life insurance:

  • Not a financial priority: 55 percent
  • Too expensive: 51 percent
  • Don't have dependents: 50 percent
  • Too young to need coverage: 26 percent
  • Don't trust insurers: 25 percent