A majority of people believe life insurance is a valuable tool for estate and financial planning, but two-thirds of that group cite other priorities as a major obstacle to purchasing life insurance, according to a new ING U.S. study, “Insurance Revealed.”
Seventy-eight percent of survey respondents said life insurance was an important tool for estate and financial planning, and 53 percent said they believed the current economy makes life insurance even more important today than in past years.
Fifty-one percent of respondents said that paying off debt or a mortgage were more important than purchasing life insurance, while 61 percent said they had never calculated their life insurance needs and one-quarter of those insured felt extremely confident they had enough coverage.
While 62 percent identified family as the number one reason to purchase life insurance, many couples confirmed 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 Insurance Awareness 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 protect retirement savings (4 percent) or build wealth (1 percent). Insurance Revealed illustrated that life insurance’s unique ability to grow assets is underappreciated.
Of those surveyed, 44 percent had little or no confidence that the amount of life insurance coverage they had was sufficient. Twenty-three percent of those between ages 25 and 34 thought they were too young to purchase life insurance.
Nearly half of respondents said they look to their employer as their only source of life insurance. Employees with 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.
The ING U.S. study revealed individuals who purchased life insurance face-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.
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.