For many consumers, the biggest thing that holds them back from purchasing life insurance or adjusting their coverage is their concern over the financial impact. The majority of life insurance policyholders and potential customers are in good health and are likely very far from their death benefit being paid out, so for these customers, life insurance presently seems like more of a cost to their lives than a benefit.
No person should go without life insurance coverage due to financial concerns. In this blog, we’d like to explore some of the most prevalent financial concerns surrounding life insurance and help customers to feel more at ease.
Findings from the 2018 Life Insurance Barometer Study
Each year, Life Happens and LIMRA team up to release their Insurance Barometer Study, and in October they released their 2018 study. The report examines a number of factors including the process of purchasing life insurance online, customers’ thoughts on simplified underwriting, common misconceptions about life insurance coverage, and what keeps people from purchasing coverage. This year, many of the most common worries were centered around finances.
- Saving for Retirement. 42 percent of surveyed consumers stated that they were very concerned about saving for a comfortable retirement, with 20 percent reporting that it was their top financial concern.
- Physical Exam. 50 percent of consumers stated that they would be more likely to purchase life insurance coverage if it was priced without a physical health exam.
- Other Living Expenses. For 13 percent of surveyed consumers, living expenses were the top financial concern. 61 percent of respondents stated that they did not purchase life insurance or more coverage because they had other financial concerns that were of a higher priority.
- Partner Coverage. For households, the subject of coverage can be a tricky one. For Millennials, 40 percent of respondents said that they wished that their spouse or partner would purchase more coverage. In general, 90 percent of respondents believe that the household’s primary wage earner needs life insurance coverage, and 35 percent of households stated that if their primary wage earner passed away, they would feel the financial impact within one month.
It is worth noting that of those surveyed, 44 percent of Millennial respondents in particular vastly overestimated the cost of life insurance, to the tune of five times the actual cost. Many of the above concerns could easily be addressed by contacting a life insurance agent and receiving an accurate quote from them or discussing the various coverage options, many of which are quite affordable.
The Loss of a Spouse
In the previous section, we mentioned household life insurance coverage and respondents’ worries about the death of their spouse. Another recent study explored this concern and how it relates to life insurance.
The survey reported that almost 40 percent of widows whose spouses did not have life insurance stated that within a year, they were struggling financially or barely making ends meet. Widows of men with life insurance fared a little better, reporting that the proceeds lasted an average of almost two and a half years. All surviving spouses stated that they desired at least eleven years more of coverage.
In 2013, New York Life’s Insurance Gap Study found that many were only covered for up to three years by their life insurance, when they really needed approximately 14 years.
This illustrates why it is crucial to meet with your life insurance provider after any major financial changes, marriage included. Thirty (30) percent of women surveyed stated that they wished that they had had a detailed discussion with their spouse about what would happen to their finances if one of them were to pass away, and 28 percent also stated that they should have had a better financial plan in place. Communicating with members of your household and with your insurance agent about your coverage and your concerns is the first step to ensuring that you will have enough coverage to replace lost income or establish a trust.
About National Catholic Society of Foresters
At National Catholic Society of Foresters, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. Sales from our financial services products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. Our portfolio is extensive, ranging from various life insurance policies to IRA’s to support your financial needs no matter what stage of life you’re in. For more information, contact our friendly experts today at (855) 804-7424.