One-third of Americans say income replacement is their main priority when it comes to buying life insurance, and yet, the average life insurance policy will only replace 16 percent of the income an individual will earn until retirement.

According to Nationwide Financial, that adds up to a $1.2 million shortfall in coverage for the average American. The company also says affordable life insurance rates may mean it will be easy for many families to make up the difference.

Families may be left vulnerable

Individuals may buy life insurance for a variety of reasons, but 33 percent of those surveyed told Nationwide Financial that replacing their income was the most important consideration used when purchasing a plan. However, most individuals have nowhere near the level of life insurance needed to fill this purpose.

Nationwide notes the average consumer holds $300,000 in life insurance coverage but will earn approximately $1.5 million before they die. That means the average American has a $1.2 million gap between their level of coverage and the amount of money their family would need to replace their income.

"Too many Americans make the mistake of assuming that simply providing what may appear to be a large lump sum of money for their beneficiaries will be enough to protect them," said Eric Henderson, senior vice president of life insurance and annuities for Nationwide Financial, in a written statement. "Instead, they should think about how much of their income the insurance money will replace. If it doesn't replace a high percentage of it, their family faces the risk of financial disruption or a reduced standard of living."

$100 may buy $2.6 million in life insurance

While a $1.2 million policy may seem out of reach for most Americans, Nationwide says consumers may be surprised to learn how affordable life insurance rates are today.

The company reports consumers say they would be willing to spend an average of $99 a month to get the coverage their family needs. At Nationwide, a healthy 35-year-old man who qualifies for the best underwriting class could get a 20-year term life policy worth $2.3 million for that amount. Meanwhile, a 35-year-old woman in good health could pay $99 a month and get $2.6 million in term life coverage.

Since prices can vary depending on an individual's age and health, consumers may want to compare multiple life insurance quotes to ensure they are getting the maximum coverage possible for the lowest premiums.