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Life Insurers Must Compete Harder With 'Passing the Hat': Prudential

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Prudential Financial Inc. has a message for life insurance professionals, other insurers, and the general public: buying life insurance is a much better deal than “passing the hat” to come up with the cash to pay for a funeral.

The Newark, New Jersey-based insurer recently found, when it conducted a survey through Twitter, that 49% of the survey participants had contributed to a memorial or funeral expense crowdfunding campaign in the past year.

(Related: Integrity Marketing Acquires Final Expense Life Distributor)

About 22% of the 18,613 participants said they had contributed to a final expense crowdfunding effort for a friend or relative, and 13% said they had contributed to a final expense crowdfunding effort for a stranger.

Salene Hitchcock-Gear, the Prudential executive who posted the survey tweet, expressed sadness about many people’s reliance on crowdfunding to pay for funerals.

“It’s heartbreaking to see so many families left to rely on the generosity of the crowd to help cover ever-increasing end-of life expenses when a loved one passes away,” Hitchcock-Gear said in a tweet.

In an infographic Prudential has prepared to convey its concern about final expense crowding, the company cited 2015 data from the Funeral and Memorial Information Council. The council found that one in six of the consumers ages 20 to 39 that it surveyed reported that they had solicited money for funeral expenses, or donated money for funeral expenses.

The average funeral cost more than $7,000 in 2014, and the average final expense crowdfunding campaign raised only about $3,000, according to Prudential.

A typical 30-year-old can buy $100,000 term life insurance for just $17 per month, and the beneficiaries can use the benefits to cover many different expenses, such as ordinary bills, as well as funeral and memorial expenses, Prudential explained in the infographic.

— Read Aims New Tool at Final Expense Planners, on ThinkAdvisor.

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