Studies: Target couples for life insurance

By Carrie Burns

Source: http://eba.benefitnews.com

 

Thirty-nine percent of U.S. adults do not have life insurance, according to survey results released by InsuranceQuotes.com. And many of the 2,000 Americans surveyed who do have life insurance appear to be underinsured and not as knowledgeable as they should be about their policies.

These results and other survey results from ING and MetLife, all announced in conjunction with Life Insurance Awareness Month, suggest that a substantial number of Americans are inadequately prepared for end-of-life issues.

Today, ING announced findings from a consumer study of attitudes and behaviors toward life insurance. According to the research, “Insurance Revealed,” 78% of respondents — 1,006 adults over the age of 25 — viewed life insurance as a valuable tool for estate or financial planning, and 53% believed that the current economy makes life insurance even more important today than in past years. However, 51%  of respondents cited other priorities, such as paying off debt or a mortgage, as major obstacles to purchasing life insurance.

The study also revealed individuals who purchased life insurance face-to-face with a financial professional felt the most confident and knowledgeable about their coverage, and 49% look to their employer as the only source for insurance coverage. Employees without access to life insurance benefits at the workplace were seven times more likely to have no coverage at all than employees who did have access.

Meanwhile, 61% had never calculated their life insurance needs and 44% had little or no confidence that the amount of life insurance coverage they had was sufficient.

The study also showed communication is an area for further opportunity. While 62% identified family as the number one reason to purchase life insurance, many couples confirmed that they avoid discussing the issue. Among married respondents, 45% had rarely or never talked with their spouse about what would happen to the family finances should one of them pass away.

MetLife’s 10th Annual “Employee Benefits Trends Study,” released last week, highlighted similar findings. It found that marriage appears to be a catalyst for working men and women to obtain life insurance protection. However, when children enter into the equation, parents are not adjusting life insurance coverage to accommodate the change. About half of single working men and women without children have some amount of life insurance, a percentage that climbs to 72% for married workers without minor children but only increases marginally, to 75%, for married couples with youngsters.

The study found that workers both with or without minor children have, in general, only about three times their annual household income covered by life insurance. This amount may be inadequate with the addition of children as the number and age of dependents should be taken into consideration when determining the amount of coverage needed.

 


Many Say Life Insurance Is More Important than Ever in Current Economy

Sources: sacbee.com and ING U.S.

Family is key driver for purchase decisions; majority confirm benefits of coverage, yet inaction and lack of communication continue to pose barriers

MINNEAPOLIS, Sept. 12, 2012 -- /PRNewswire/ -- In support of Life Insurance Awareness Month, ING U.S. today released findings from a new consumer study that underscores striking disconnects in attitudes and behaviors toward life insurance.

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According to the research, Insurance Revealed, most survey respondents (78 percent) viewed life insurance as a valuable tool for estate or financial planning, and more than half (53 percent) believed that the current economy makes life insurance even more important today than in past years. For more information on the study, please visit the ING U.S. newsroom at ING.us/Newsroom

However, despite recognizing its value and importance, a significant number (51 percent) cited other priorities, such as paying off debt or a mortgage, as major obstacles to purchasing life insurance.  Meanwhile, 61 percent had never calculated their life insurance needs and only one-quarter of those insured felt extremely confident that they had enough coverage.

The study also showed communication is an area for further opportunity.  While 62 percent identified family as the number one reason to purchase life insurance, many couples confirmed that they avoid discussing the issue.  Among married respondents, 45 percent had rarely or never talked with their spouse about what would happen to the family finances should one of them pass away.

"Life insurance is one of the least discussed components of a family's financial plan, yet it plays such an integral role in providing for a secure future," said Butch Britton, CEO of ING U.S. Insurance.  "Without candid conversations among spouses, family members and financial professionals, many Americans risk being underinsured and having inadequate coverage in the event of a loss.  We hope our study and outreach efforts, especially during Life InsuranceAwareness Month, can help initiate the necessary conversations that lead to greater protection and, ultimately, greater peace of mind."

According to the findings, respondents were most familiar with the protection benefits of life insurance and they placed the greatest value on the more obvious uses such as replacing lost income (26 percent) and paying off debt (23 percent).  Very few highlighted its value to protectretirement savings (4 percent) or build wealth (1 percent).  Insurance Revealed illustrated that life insurance's unique ability to grow assets is underappreciated.

Coverage Conundrum

Regarding coverage matters, the ING U.S. study found close to half (44 percent) of Americans had little or no confidence that the amount of life insurance coverage they had was sufficient.  Close to one quarter (23 percent) of those between 25 and 34 thought they were too young to purchase life insurance.

Meanwhile, the study underscored the important role that the workplace represents in obtaining coverage.  Nearly half of insured respondents (49 percent) said they looked to their employer as the only source for insurance coverage.  Employees without access to life insurance benefits at the workplace were seven times more likely to have no coverage at all than employees who did have access.

On another positive note, the ING U.S. study revealed individuals who purchased life insuranceface-to-face with a financial professional felt the most confident and knowledgeable about their coverage.  Among that group, seven-in-ten (70 percent) felt very or extremely confident about their coverage compared to just 56 percent for all insured respondents.

Additional findings from the ING U.S. Insurance Revealed study included the following:

  • A majority of parents (54 percent) had not calculated how much life insurance they need to adequately protect their family.
  • A majority of uninsured Americans (51 percent) considered life insurance to be an expense they couldn't afford — despite historically low rates.
  • More than half (56 percent) of those with life insurance had secured only up to three times or less of their annual salary in coverage.
  • More than one quarter (27 percent) felt they should have five to ten times their annual salary in coverage.  However, only 17 percent of insured respondents actually had this amount.
  • Half of insured respondents knew somebody who was positively impacted by life insurancecompared to only one-third (34 percent) of uninsured respondents.

 

The Facts of Life Insurance

ING U.S. is promoting greater awareness and understanding of life insurance through a multi-faceted, ongoing educational effort to mark Life Insurance Awareness Month in September.  Intended for both consumers and financial professionals, the ING U.S. initiative highlights the many benefits of life insurance and how it can be used to meet a variety of financial goals.

ING U.S. encourages consumers to take the appropriate steps today to learn about life insuranceand factor it into their overall financial planning.  As a leading insurance provider, ING U.S. offers a comprehensive suite of tools and resources including INGForLife.com where consumers can find helpful and easy-to-use insurance information.  In addition, financial professionals can use this online resource as a valuable tool to start conversations with clients.  To help employees with life insurance, ING U.S. provides comprehensive group and voluntary life insurance protection through the workplace.

ING U.S. offers extensive education to build awareness of the versatile uses for life insurance — from income protection to accumulation.  A full gamut of seminars, conferences, consultative support and targeted materials are available to ING U.S.'s wide distribution network to educate and raise awareness about life insurance.

For more information on ING U.S.'s Insurance Revealed study, please visit the ING U.S. newsroom at ING.us/Newsroom.

1.  Findings are from an online survey conducted by Praxis Research Partners in July 2012.  Respondents were 1,006 adults over the age of 25 with an annual household income of $50,000 or greater.  Data were weighted to make the results representative of the U.S. population.