Life Insurance

Americans looking to future financial needs sooner rather than later

From estate likely to long term care, the financial strategy needs of Americans are varied, and age often plays a major role in what financial advice individuals require. The aim for insurance producers and other professionals employed in the financial planning industry is to determine what advice clients need and when.

According to the 2019 Insurance Barometer Study in the Life Insurance Marketing Research Association and nonprofit health and life insurance foundation Life Happens, securing enough money for a comfortable retirement tops the list for client concerns. Paying for medical care, affording long term care services and having enough money to support themselves when they become disabled or are otherwise unable to work rounded out the top four.

What many clients may not realize is, life insurance can behave as a highly effective tool for those these concerns. Besides acting as a financial safety net for loved ones upon their passing, life insurance policies can act as valuable assets individuals can tap into for extra retirement income in order to pay for medical bills.

While financial professionals may assume it’s their older clients who are most worried about issues like retirement income and long-term care, the data actually shows younger Americans are becoming increasingly focused on these topics.

Looking to the future, sooner

Among demographics, only 44% of those aged 65 and over cited money for a comfortable retirement his or her greatest concern. Meanwhile, 62% of people between the ages of 45 and 64 made it their largest focus. That number was even higher for individuals aged between 22 and 44, at 74%.

One reason behind this trend is growing uncertainty among younger generations regarding Social Security, according to the insurance coverage Barometer Study. However, retirement wasn’t the only area where younger Americans were starting to concentrate their planning efforts.

“People in younger age groups are also increasingly worried about medical expenses, especially those under 25, a group whose worry over such costs has grown over the last couple of years,” the study stated. “Younger consumers may be more anxious about continued rising health care costs and what programs and funds (such as Medicare and Medicaid) will be at hand if and when they need them.”

While it’s clear Americans across various age groups are hungry for increased financial stability for future years, the challenge for financial professionals seems to be helping their clients understand how making life insurance a priority might help.

Other costs interfering with coverage

Regardless of age group, the everyday costs of living were cited because the major barrier keeping consumers from investing in life insurance. These expenses include things like mortgage payments and household bills.

However, data shows that many consumers may be mistaken regarding the cost of life insurance.

“For instance, while 2 from 3 consumers say life insurance coverage is too expensive to buy, people have a tendency to overestimate the price,” the study continued. “In fact, a quarter of respondents thought the price for a $250,000 term policy (that would cost $150 per year) would cost at least $1,000 annually. Overall, more than 80 percent of people overestimated the price, that has been the case over the past few years.”

Additionally, a few of the other costs people cited as keeping them from purchasing insurance are expenses that a life insurance policy can sort out, such as saving for retirement.

This latest study ultimately has two primary takeaways for financial professionals. First, clients are becoming more interested in how to obtain financial security for future years at a younger age. Secondly, many consumers may not know how affordable comprehensive coverage can be, as well as how it can serve their financial planning needs.

Fortunately, financial professionals have been in an ideal position to assist their clients understand the worth of life insurance, as well as how it can be fully utilized later on at an affordable cost.

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