Americans are uninformed on yet another crucial financial matter – the cost of life insurance.
Consumers believe life insurance costs nearly three times the actual price, according to a new LIMRA and LIFE Foundation study. Survey respondents were asked to estimate the annual cost of a 20-year, $250,000, level-term life policy for a healthy 30-year-old consumer. While the actual cost is $150 per year, most respondents estimated the cost at about $400. Younger respondents overestimated by nearly 7 times the actual cost.
If Americans think life insurance is this expensive, how many are buying it?
While nearly 9 in 10 have life insurance
, a third of Americans believe they need more coverage. Eighty-three percent of those individuals say the top reason they aren’t purchasing more is because it’s too expensive.
Would an informed population make a life insurance agent’s job easier?
I say, yes, if Americans were better informed about finance and insurance, it would make an advisor’s job easier. Not only would Americans know the true cost of life insurance
, they’d also know why it is so important to have adequate coverage, leading more to buy it.
Agents can do their part.
As Financial Literacy Month comes to a close, think about the efforts you’ve made to educate your clients
and your community about the importance of insurance and financial planning. If you’ve solely been focusing on educating your clients
, then start making an effort to inform your community — it may bring you more clients.