Due to skyrocketing unemployment rates in the face of the pandemic, countless Americans have experienced economic struggles. And unfortunately, according to a recent survey from ValuePenguin, many have chosen to cut back on insurance in order to make ends meet.
While 26 percent of survey respondents said that they would never slash their insurance, 39 percent chose to reduce or eliminate their insurance costs in order to save money or afford more pressing necessities. Key findings from the survey include:
Almost four in 10 Americans cut back on insurance coverage in 2020, primarily to save money. That number jumps to 65 percent of those laid off or furloughed due to the coronavirus pandemic.
Health insurance was the most common policy that consumers decreased coverage for or eliminated altogether, followed by auto insurance and dental insurance. Forty-two percent of women who eliminated or decreased their insurance coverage said they couldn't afford it, compared with 23 percent of men.
Of those who eliminated or decreased their insurance, most are putting that money toward groceries (27 percent), savings (23 percent) and debt payments (21 percent), as well as monthly housing costs (15 percent).
Sixty-three percent of those who reduced insurance coverage in 2020 regretted doing so, and more than half expect to restore their coverage level at some point in the future.
Although insurance is costly (about one in five respondents said they spend $500 or more on monthly premiums), not having insurance can be expensive, too. For example, 58 percent of respondents don't have dental insurance, which means they could be facing a big out-of-pocket bill should they have a tooth-related emergency.
If you’re experiencing financial difficulties, speak with your insurance agent about options before canceling a policy. A professional financial advisor can also help you look at the entire scope of your finances to find solutions and programs that can help ease the current burden.
