Employee benefits provider Unum finds that 38% of U.S. adults rate their ability to manage finances as average, poor, or very poor. An additional 40% of respondents say they don’t have or don’t know if they have a life insurance policy to financially protect their loved ones.
These findings and more are part of an online poll of 1,000 U.S. adults conducted by Unum in August. These consumer insights coincide with Life Insurance Awareness Month, promoted annually by the nonprofit organization, Life Happens.
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The same study highlighted additional financial exposure and anxiety, including:
- 35% say thinking about what would happen to their family should they die unexpectedly was a top cause of anxiety; only going to the dentist (40%) rated higher.
- If the family’s primary wage-earner were to die unexpectedly, 32% of those in their prime working years (25-64) would feel the financial impact within a month.
- 34% think they need just one or two times their annual salary in life insurance to financially protect their family.
According to life insurance industry group, LIMRA, nearly half of U.S. households are underinsured, with an average coverage gap of $200,000. Additionally, the group recommends an individual have seven to 10 times their salary in life insurance1.
“While it’s not surprising that so many adults aren’t confident in their financial planning abilities, it’s concerning that such a large percentage are leaving their families financially unprotected,” said personal finance expert, Laura Adams. “For most people, their ability to earn an income throughout their life is the biggest asset they have, and term life insurance is a relatively inexpensive way to protect that asset until they retire, or their family financial obligations decrease.”
Of survey respondents working full-time, 46% purchase life insurance through their employer, most often during an open enrollment period in the fall. However, according to a separate survey by Unum of 1,512 working adults also conducted in August, 50% spend 30 minutes or less reviewing all their benefit options prior to enrolling.
The most important reason for having a life insurance policy is to financially protect loved ones. If they count on the primary wage-earner’s income or other financial resources, life insurance helps assure they’re covered if that individual passes away. It can also cover funeral expenses, pay off debt, pay estate taxes and for things like a child’s education, student loans, or a home mortgage.
In 2018, Unum’s group life insurance plans paid $1.1 billion in claims to more than 24,000 families. Visit Unum’s life insurance page for more information.
1. LIMRA, “What Do Employees Know About Life Insurance?” (2018).
Unum Group provides a broad portfolio of financial protection benefits and services through the workplace, and is the leading provider of disability income protection worldwide. Through its Unum US, Unum UK, Unum Poland, and Colonial Life businesses, the company provides disability, life, accident, critical illness, dental and vision benefits that protect millions of working people and their families. Unum also provides leave and absence management services that streamline the leave experience for employers and employees, and stop-loss coverage to help self-insured employers protect against medical costs. Unum reported revenues of $11.6 billion in 2018 and paid $7.2 billion in benefits.