Half of consumers age 25-34 (52 percent) say they are very or extremely concerned about having sufficient funds for a comfortable retirement compared with just 46 percent of consumers age 35-54, according to a new report.
LIMRA and Life Happens (formerly the LIFE Foundation) disclose this finding in “The 2014 Insurance Barometer Study.” The organizations conducted the fourth annual survey in January 2014, polling 2,047 U.S. adults age 18-75. The report weights the data by age, gender, education, race, region and income to be representative of the general population.
The research indicates that 27 percent of Millennials are as concerned about paying for a child’s schooling (compared with 20 percent of those age 35-44) and burdening others with final expenses (26 percent, compared with 19 percent of consumers age 35-44).
Of all age groups, consumers under age 25 evince the greatest concern about paying for medical expenses (43 percent are very or extremely concerned), leaving dependents in a difficult situation if they were to die prematurely (38 percent), and paying for a child’s schooling (36 percent). According to the study, 31 percent of adults believe they would feel the financial impact from the loss of a primary wage earner within one month of their passing. Consistent with previous years, 65 percent of consumers agree that they personally need life insurance and 27 percent believe they need more.
One-third of those surveyed under age 25 (33 percent) and age 25-34 (29 percent) say they need more.
The most commonly cited reason survey respondents provide for not purchasing more is cost (63 percent cited “too expensive”) followed next by having “other financial priorities” (59 percent). When asked the price for a $250,000 level-term life insurance policy for a healthy 30-year-old, the median estimate given by individuals under the age of 25 years is $1,000 — nearly 10 times its actual cost of $150 a year. Nearly one-in-five consumers in this age group believe the same policy costs more than $3,000.
“Our findings showed an astounding lack of awareness about the true cost of life insurance,” says Todd Silverhart, corporate vice president of LIMRA Insurance Research. “Yet, younger consumers are not alone in this misconception. “Overall, more than 80 percent of Americans we surveyed overestimate the cost of life insurance and this misconception hasn’t changed much in recent years,