As a result of challenging economic times, Americans are more showing interest in life insurance, according to results of two surveys. According to a survey released by the Life and Health Insurance Foundation for Education (LIFE), 56% of Americans say the economic downturn has made it more important to have life insurance, compared to just 9% who believe the need has diminished. Moreover, during the past year more people appear to have added to their life insurance coverage than have lost or reduced their coverage.
Another survey backs up these numbers. The survey, sponsored by New York Life Insurance Co., shows 83% of Americans 30 years of age and older agree that the economic crisis has increased their desire to provide financial protection for their family. Adults aged 30 to 49 (88%) and parents with children under the age of 18 (88%) are particularly likely to have this desire.
While the downturn in the economy has contributed to some Americans dropping or decreasing their coverage in the last 12 months, historically, life insurance sales receive a boost when consumers feel financially vulnerable due to downturns in the economy and stock market, according to LIFE. LIFE’s survey found that a majority of Americans with life insurance coverage, 71%, made no changes to their coverage over the past year. Of those who did make alterations, 39% increased existing coverage and 28% bought life insurance for the first time.
“The economic crisis has been a wake-up call for families and most are seriously concerned about protecting their loved ones, yet many still lack a secure plan to do so,” says Mark Pfaff, EVP of U.S. Life and Agency, New York Life. “The solutions that many Americans would turn to in a crisis, including depleting retirement savings and taking an additional job, would require painful and difficult choices with serious repercussions for the family. These findings show that there is more work to be done to educate families about how life insurance helps to provide peace of mind and future financial well-being for loved ones.”
In fact, when asked what would primarily fund the family’s future financial goals if something were to happen to the breadwinner, nearly a quarter of the New York Life survey respondents said they would take an additional job (22%) or draw down their retirement savings (22%). Another 7% said they would seek the help of family and friends and 1% would hope to win the lottery. Thirty-two percent of Americans said that they would primarily rely on life insurance to help finance their families’ future.
September is Life Insurance Awareness Month (LIAM). New York Life and LIFE are partnering to sponsor the sixth LIAM campaign, created in response to growing concern about the large number of Americans who lack adequate life insurance protection.
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