Talk about finding silver linings in cloudy weather.

LIMRA, a global research and consulting organization serving the insurance and financial services industry, in a study this week, says that while life insurance ownership is at an “all-time low” in terms of the percentage of families that have coverage, this situation presents advisors with a huge opportunity for new policy sales.

As the study puts it, “The opportunity has doubled since 2004,” the last time the organization conducted such a study. 

In 2010, the study reports, half of U.S. households -- 58 million families-- said they needed more life insurance coverage, which LIMRA says represents a sales potential of a staggering $17.5 trillion worth of policies.

The study counted both the number of U.S. households that “readily admit they are underinsured,” and, separately, the number of households that said they thought they might buy life insurance in the next 12 months.”

The study found more Generation X households planning to buy life policies than Generation Y or Baby Boom households. 

Since three-quarters of Gen X householders are married, and since half of these families have a child under 18 living at home, the report found that these parents are the prime candidates for insurance sales.

The LIMRA study found three main reasons that people did not buy life insurance policies:

The first was competing financial priorities, or a concern that the family “couldn’t afford” insurance.  

The second reason was lack of knowledge. Fully 44% of those who said they need life insurance said they hadn’t bought a policy “because they don’t know how much to buy.”

Finally, the third reason given was procrastination and a reluctance to initiate the process.  LIMRA reports that 54% of those likely to buy insurance within the next year said that they “just haven’t gotten around to it.” A third said they had not purchased insurance “because no one has contacted them.”

Meanwhile, the study found that the key motivators for buying a policy were to help survivors pay for burial expenses, to replace the income of primary wage earners, or to pay off a mortgage. 

Forty-five percent of consumers said they were influenced to buy life insurance because of a major life event, such as a marriage, divorce, birth of a child, or death of a relative or close friend.

Cheryl Retzloff, senior research director, LIMRA Markets Research, and author of the study, said, “The underinsured life insurance market offers financial professionals tremendous opportunity. With 35 million underinsured middle market households in total, half of them [are] thinking they might be ready to buy life insurance in the next year.”