“Protecting your assets and aspirations is a critical part of a comprehensive financial strategy,” said Ken Cella, principal of the Client Strategies Group at Edward Jones. “Financial goals can be put at risk without warning, so it is essential to consider life insurance when preparing for the unexpected in order to help safeguard your family and retirement savings.”
Protection for the Unexpected: Americans Come Up Short
Although Americans work hard to provide for their families and invest in their futures, one quarter of respondents stated that their biggest worry if they were unable to work or died tomorrow would be leaving financial burdens on loved ones. However, many do not have adequate protection if something unexpected occurs.
Many Americans understand the value of having emergency funds to cover unexpected financial expenses in the short-term, but they are less protected for the long-term financial implications. Many families have not thought beyond immediate emergencies when it comes to protecting their loved ones financially.
“Having emergency savings is critical in a pinch, but it’s not a long-term financial solution, especially if a family’s primary breadwinner were to die,” says Faisa Stafford, president of Life Happens. “That’s where life insurance comes in. And the good news is, it’s an affordable option for most.”
Americans are Unaware of the Many Uses of Life Insurance
While a number of misconceptions surrounding life insurance deter people from purchasing individual policies, Americans’ lack of awareness of how life insurance can fit their needs is among the most detrimental to their long-term financial goals. When presented with a list of expenses that life insurance can cover, including funeral costs, retirement income, estate considerations, estate taxes, charitable donations and education costs, roughly one quarter of respondents (23 percent) were unable to identify any of these options.
For respondents who were able to identify potential uses of life insurance benefits, funeral costs (67 percent), retirement income (28 percent) and estate considerations (26 percent) were the most well-known. The number of adults aware of life insurance’s value for estate considerations drops to one quarter (25 percent) for Americans with children in their households, underscoring the lack of awareness of life insurance as an estate considerations tool.
Life Insurance and the Financial Puzzle
The tide is shifting for where Americans purchase life insurance. When respondents were asked where they would buy policies, insurance companies (43 percent) came in first, followed by independent agents/brokers (33 percent) and financial advisors (21 percent). However, Millennials are more likely to buy life insurance from their financial advisors than Gen Xers or Baby Boomers (28 percent versus 21 percent and 14 percent, respectively), helping them fit insurance planning into their holistic financial planning strategies.
“Choosing the right type and amount of life insurance can be demystified by working with a financial advisor who understands what’s most important to you, your family, your financial situation today, and your goals for the future,” added Cella. “It’s encouraging to see that younger generations are recognizing the value of discussing not just their financial goals, but also their life insurance needs with their financial advisor – the one person who understands their financial goals and how to help protect them, better than anyone else.”
More information including calculators and other helpful tools can be found by visiting: www.edwardjones.com/protection
Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico, and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.
The Protecting What Matters Most Study was conducted by Engine’s Online CARAVAN® Omnibus among a national sample of 2,008 adults comprising 1,004 men and 1,004 women 18 years of age and older from December 17-23, 2018.
About Edward Jones
Edward Jones, a FORTUNE 500 firm, provides financial services for individual investors in the United States and, through its affiliate, in Canada. Every aspect of the firm’s business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm’s 17,000 financial advisors work directly with more than 7 million clients and care for $1 trillion in assets under management. Edward Jones is headquartered in St. Louis. The Edward Jones Web site is located at www.edwardjones.com. Member SIPC
About Life Happens
Life Happens is a nonprofit organization dedicated to helping consumers take personal financial responsibility through the ownership of life insurance and related products. The organization does not endorse any product, company or insurance advisor. Since its inception in 1994, Life Happens has provided the highest quality, independent and objective information for people seeking help with their insurance buying decisions. The organization is on the leading edge of technology innovation to support the insurance industry by providing marketing and social-media tools and resources through its proprietary Life Happens Pro digital platform. In addition, it convenes the industry each September for Life Insurance Awareness Month, which it created in 2004. Life Happens is supported by more than 140 of the nation’s leading insurance company and financial services organizations. To learn more, visit www.lifehappens.org.