A large percentage of caregivers do not have checking accounts. This presents a challenge to those in the financial services community who want to reach this population group.
LIMRA conducted a series of studies of the 43 million working-age Americans who serve as unpaid family caregivers. Although so much of the financial services industry has focused its attention on those who need care, the population segment that provides care has its own set of needs.
The second in this series of three studies looks at the savings needs of caregivers.
One finding that jumped out is that caregivers are significantly less likely than those in the general population to own bank accounts. One in five caregivers – an estimated 15 million people – is “unbanked,” meaning they do not have a savings or checking account at an insured banking institution. This compares to 6.5 percent of American households who do not have a bank account.
The seeming reluctance to use a traditional bank sends a message to financial marketers, said James Scanlon, LIMRA senior research director.
“It says quite a bit about the different levels of financial sophistication and the different types of behavior that exist within this community,” he said. “The fact that there are so many caregivers who are unbanked really leads me to believe that it’s an indicator of other financial behaviors in this population that are very important to the insurance industry.”
'An Extra Challenge'
Although the fact that caregivers have a low rate of banking usage in and of itself is not critical to the insurance industry, Scanlon said, the inference is that caregivers also are reluctant to use other mainstream financial institutions such as insurance companies.
“That tells people who are in that financial marketing role that they have an extra challenge in reaching this group,” he added.
The 20 percent of the caregiver community that is unbanked is a population that the financial services industry should not ignore, Scanlon said. “Do we just want to forgo that 20 percent? No. We want to serve that population just as much as we want to serve everyone else.”
One obstacle in reaching the unbanked caregivers is trust or custom.
“That means you can’t really approach them like a normal consumer from a marketing perspective with normal information about products and services if they don’t have normal exposure to banking products,” Scanlon said.
He suggested that marketers could reach caregivers with messages that center on building trust with them, as well as on financial products and services that can benefit them as well as their care recipients.
Credit Card Debt An Issue, Too
In addition to a lower usage of traditional banks, caregivers tend to have higher credit card debt than that of the general population, LIMRA researchers found. Twenty-five percent of the caregiver community carries at least $2,000 in credit card debt, compared with 19 percent of the general population. The numbers go beyond just dollars and cents, Scanlon said.
“By and large, a lot of the caregiver population has lower household income than that of the general population. So the picture is even worse,” he said. “This tells us that caregivers can use some help in terms of strategies for getting out of debt.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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