From estate planning 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 goal for insurance producers and other professionals working in the financial planning industry is to determine what advice clients need and when.
According to the 2014 Insurance Barometer Study from 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 if they become disabled or are otherwise unable to work rounded out the top four.
What many clients may not realize is, life insurance can act as an effective tool for all 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 or to pay for medical bills.
While financial professionals may assume it’s their older clients who are most concerned 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 as their 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 for this trend is growing uncertainty among younger generations regarding Social Security, according to the Insurance 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 concerned 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 available to them if and when they need them.”
While it’s clear Americans across various age groups are hungry for increased financial stability for the future, the challenge for financial professionals seems to be helping their clients understand how making life insurance a priority can help.
Other costs interfering with coverage
Regardless of age group, the everyday costs of living were cited as 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 out of 3 consumers say life insurance is too expensive to purchase, people tend to overestimate the cost,” 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 cost, which has been the case over the past few years.”
Additionally, some of the other costs people cited as keeping them from purchasing insurance are expenses that a life insurance policy can help with, 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 the future at a younger age. Secondly, many consumers may not understand how affordable comprehensive coverage can be, as well as how it can serve their financial planning needs.
Fortunately, financial professionals are in the perfect position to help their clients understand the value of life insurance, as well as how it can be fully utilized in the future at an affordable cost.