Americans: Family Financial Health Would Be Most Affected by Fraud, Death

May 23, 2008

This article is included in these additional categories:

Boomers & Older | Financial Services | Household Income | Pharma & Healthcare

The loss of one’s accumulated savings due to identity theft/fraud (50%) and one’s own death or that of a spouse/partner (45%) would have the most negative impact on a family’s financial health and future, according to a survey of Americans’ attitudes on life insurance.

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Conversely, falling home prices (12%), becoming responsible for an ailing or elderly adult (14%) and a stock market crash (22%) are circumstances that rate lowest in terms of potential negative fallout for a family’s financial health and future, according to the poll conducted by Ipsos on behalf of ING.

Though majorities of Americans rate most of the 15 scenarios presented to them as having an extremely or very negative impact on their families’ financial health, most also agree that they protect and save their money better than their parents (58%)?and their friends (65%) do.

Other key findings from the study:

  • Seven in ten adults say life insurance is something they would not do without, reflecting the proportion of adults who say they have life insurance (71%). However, nearly nine in ten say that someone in their situation should have life insurance.

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  • Almost one quarter (22%) of those who believe that someone like them should have life insurance do not have any.
  • Many of those who do not think they need life insurance say they already have enough saved or that they do not have any beneficiaries.
  • Life insurance is most widely associated with money for loved ones and for covering funeral costs when one dies.
  • Contacting an agent – either through a referral from a friend or family member, calling directly, or using the Yellow pages – are the top three things that adults say they would do first if they were interested in obtaining life insurance.

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  • Some of the most important factors when purchasing life insurance are using an agent one can trust who clearly answers all questions and being treated like a valued customer. Assurance that one is getting a good value is also a top factor.
  • When deciding how much life insurance is needed, Americans most often turn to their insurance agent or financial advisor, their friends or family, or just choose the standard option offered by their employer.
  • Fitting general perceptions of life insurance, majorities say that they would absolutely need their funeral costs, a year or two of household expenses, and their children’s future education costs to be taken care of should they die suddenly.
  • Younger Americans tend look to life insurance for taking care of a wider range of needs compared with older Americans, including funeral costs, children’s future education costs and several years of household expenses.
  • They are also more likely than older Americans to say that someone in their circumstance should have life insurance.
  • Among those who have life insurance, 67% purchased some through an insurance company or agent, nearly as many (66%) get their insurance through their employer or union, and nearly half (46%) purchased some through a group or association of which they are a member.
  • Among those who get life insurance through an employer or a union, 46% say it is paid in full by the employer or union, 28 % pay for it themselves and 26% say that both they and their employer or union pays for some of it.
  • Among those who purchased life insurance through an agent or company, 56% have a permanent policy and 55% have a term policy.
  • Among those who purchased life insurance through an agent or company, 52% asked for a certain type when they went to purchase it, while 44% only asked for life insurance in general.
  • Americans tend to find electronics easier to figure out than financial matters. More say they find life insurance policies difficult to figure out (41%) than say so of DVD recorders (23%) and cell phone plans (35%). However, even more find mutual funds (57%) and time shares (48%) daunting.
  • Talking about life insurance with an agent is challenging for most Americans, as just 17% would choose this over other potentially uncomfortable situations, including bungee jumping, having a performance review at work and taking out a mortgage.

About the study: The findings are from an Ipsos/ING poll conducted in two waves – October 23-26, 2007 with 1004 interviews and January 7-11, 2008 with 1006 interviews. For each wave of the survey, a nationally representative, randomly selected sample of adults across the United States was interviewed by telephone. These data were weighted to ensure the sample’s regional and age/sex composition reflects that of the actual US population according to data from the US Census Bureau.

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