Despite turbulence in the economy, a record number of Americans reported that they would be able to cover an unexpected $400 expense, according to the Federal Reserve's annual “Economic Well-Being of U.S. Households" report.

At the end of 2021, 78% of adults reported that financially they were either “doing okay" or “living comfortably," the report found. Also, 68% of households said they could cover a $400 emergency expense using cash or its equivalent, which was the highest share the survey has ever recorded and up from 64% at the end of 2020.

Yet, according to new findings from the “2022 Insurance Barometer Study," conducted jointly by nonprofit industry trade associations LIMRA and Life Happens, as many as 2 in 5 parents say they are “barely" or “not at all" financially secure. And while the Federal Reserve's report found that a record number of Americans expect to be able to cover a $400 doctor's bill or a car repair, the 2022 Insurance Barometer found that most households haven't prepared for the loss of a primary wage earner. As many as 44% say it would take less than six months to feel financial hardship if their family lost their breadwinner.

With financial insecurity related to the loss of a loved one at its highest among Generation X (49%)—followed by millennials (44%), Generation Z (42%) and baby boomers (33%)—one way to ease these concerns is life insurance. Sixty-eight percent of life insurance owners report feeling financially secure compared with 47% of non-owners. Those who feel most secure are people who have life insurance both through the workplace and through individual coverage (78%).

“Life insurance is the foundation of any strong financial plan, and our results show it provides people with a sense of security that many are looking for, especially after the last two years," says Faisa Stafford, president and CEO of Life Happens. “The lasting impact of COVID-19 remains at the forefront for many, with the pandemic leading almost a third to say they are more likely to buy life insurance in 2022."

Meanwhile, the “need gap" for life insurance—what people have versus what they say they need—is at an all-time high and more than double what it was 12 years ago. For the sixth consecutive year, the 2022 Insurance Barometer Study found that the percentage of uninsured women has increased. Just 46% of women report owning life insurance, compared with 53% of men. However, a greater proportion of women than men recognize they need—or need more—coverage, with 44% versus 38%, respectively, admitting they lack coverage.

Despite their acknowledged need, just over a third of uninsured women (36%) say they plan to buy life insurance in the next year. The reasons women give for not having coverage include: it's too expensive (39%); other financial priorities (37%); and uncertainty as to how much or what type to buy (22%).

“There are still over 100 million people in this country who don't own enough life insurance" said David Levenson, president and CEO of LIMRA and LOMA. “And, while new policy growth jumped last year to the highest levels since 1983, there is still a lot that our industry can do to ensure that families are properly protected."

Will Jones is IA editor-in-chief.