For the fourth year, Life Happens partnered with LIMRA to produce the Insurance Barometer Study, which looks at consumer trends and consumers’ perceptions regarding life insurance, retirement and their financial well-being.
This year, one thing that stood out to us was some of the dramatic findings of the under-25 age group. These young adults were confused on a number of issues. They vastly overestimated the cost of life insurance. On average, they estimated that a $250,000 20-year, level term policy for a healthy 30 year old would cost $1,000 a year, when the actual cost is $150. Even more staggering, nearly one in five thought the cost would be over $3,000 a year.
Other things that stood out with this group was that, while all the other age groups listed their biggest concern as “having enough money for a comfortable retirement” (which has been the case every year), the under 25 group listed “paying bills” as what loomed largest. And while that may not have been a surprise in itself, certainly what they considered in that category was. They put paying for things such as internet and cell phones nearly on par with essentials like mortgage, rent and groceries (67% and 64%, respectively). The next demographic group in age, 25-44, had a 18% gap between those two.
They put paying for things such as internet and cell phones nearly on par with essentials like mortgage, rent and groceries (67% and 64%, respectively).
However, we realized that the under-25 group wasn’t a large segment of the life insurance buying population (yet!), and so we drilled down into the numbers to see if the 25-34 age group had similar characteristics. It turned out, for some things they did, and for others they did not. For some questions, such as their top financial concern—they were head-scratchingly preoccupied by retirement, even though it is decades away. For others, they did not share their younger counterparts’ inclination to lump internet/cell phones in with food and shelter.
What we were able to pull together though, was very compelling—and not just for the few data points we’ve mentioned above, but for the overall study. In fact, LIMRA says that the Barometer Study is every year among their most downloaded studies for that reason, among others.
Todd Silverhart of LIMRA and I presented the results of this study, along with Farmer agent Sandra Cavato, to a packed room at the Chicago Marriott on Monday, April 8th. It was interesting to gauge the audience reaction and hear their questions. They asked about a variety of topics and questions addressed in the study, as well as provided thoughts about other questions or studies we could do in the future.
Click the link above for the full study, or if you’d like a copy of the press release announcing the 2014 Insurance Barometer findings go to the press room here.
I’d love to know what you think. You can email me at mderrick (at) lifehappens (dot) org.