A new online survey shows just how difficult life insurance conversations can be. Parents would rather talk to their children about drugs/alcohol, religion and politics before life insurance, which is a topic only slightly more comfortable than sex/puberty. The survey also shows parents are the primary source for initial conversations about life insurance.
This topic avoidance might be one reason that 22 per cent of Americans feel they are not at all knowledgeable about life insurance. The State Farm survey, conducted by Harris Interactive among over 2,000 U.S. adults also revealed a gap in Americans’ knowledge of life insurance and general misconceptions about the benefits life insurance provides to those who are insured.
“Parents know life insurance is an important element to protecting their family, yet there seems to be a disconnect between that importance and the importance of commodities such as cable TV or cell phones,” said Joe Monk, senior vice president and chief administrator officer– State Farm Life.
“The challenging financial times experienced by families over the last several years only underscore the importance of planning for the long term and talking with those we love about family finances, including life insurance.”
“While the primary benefit of a life insurance policy is a death benefit – or the payment made upon the passing of the insured individual – some policies, such as permanent policies, also offer living benefits. These policies build a cash value that can be used over time for other life goals, such as paying for college or providing a little extra cushion during retirement,” Monk said.
Findings from key survey said that life insurance conversation is uncomfortable – When it comes to life’s most important topics, higher percentages of parents feel comfortable talking with their children about drugs and alcohol (55 per cent), religion (53 per cent) and politics (44 per cent) than discussing life insurance (38 per cent), family finances (36 per cent) or sex/puberty (30 per cent).
Parents count – 45 per cent of Americans first learned about life insurance from a family member. Daughters were most likely to name their moms (21 per cent) as their top source for first learning about life insurance, while sons are most likely to list their dads (22 per cent). Becoming a parent is the number one life event that prompts individuals to obtain life insurance coverage (37 per cent), however just 51 per cent of parents have individual life insurance policies outside of work.
More than 7 in 10 parents consider life insurance to be important (71 per cent) and over three-fourths say it plays a role in their overall financial plan (78 per cent), yet only 59 per cent of parents would be likely to adjust their budget to purchase life insurance. A greater percentage of parents would be willing to adjust their budget to afford cable TV (76 per cent), a family vacation (69 per cent), or a cell phone and service for each family member (62 per cent), compared to life insurance.
Seventy-eight per cent of Americans consider themselves at least somewhat knowledgeable about life insurance. However, one in five (22 per cent) feel they are not at all knowledgeable about life insurance.