Even in high-income U.S. households, many consumers suffer from a lack of knowledge about permanent life insurance
Analysts at Allianz Life Insurance Company of North America have reported that finding in a summary of results from a recent online survey of 803 U.S. adults ages 35 to 60. All of the participants included in the sample had an annual household income of at least $100,000.
(Related: Allianz Life Profiles Divorced Women)
About 45% of the participants with help from financial professionals, and 26% of the participants without help from financial professional, said they already have whole life insurance, universal life insurance or some other form of life insurance that can build up a cash value.
But the Allianz Life analysts say many of the consumers surveyed were hazy on how permanent life insurance works.
One of the awareness indicators the analysts addressed was consumers’ understanding of permanent life policy loan options.
Only 48% of the survey participants knew that the holder of a permanent life policy can borrow against the cash value of the policy.
Similarly, only 49% of the participants understood that the holder of a permanent life policy can use the cash value to pay college bills, or to pay post-retirement expenses.
The Allianz Life analysts also found, when looking at survey participants’ goals, that the participants were more interested in living benefits for themselves, and in protection for their children, than in leaving an estate for heirs.
About 84% said they think having access to funds in case of an emergency is important; 72% said the ability to fully fund college accounts if they die is important.
About 56% classified “being able to provide tax-free inheritance for your beneficiaries” as important.
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