The New Finance of Longevity

Knowledge Gaps That May Be Costing Life Insurance Policyholders

2020 Life Settlement & Retirement Survey finds 43% of policyholders do not know they can sell their life insurance

New Survey from Harbor Life Settlements conducted to uncover insights that help individuals make better decisions around financial and retirement planning.

AUSTIN, TEXAS (PRWEB) SEPTEMBER 24, 2020–Harbor Life Settlements, a company dedicated to helping people unlock the value of their life insurance by making the life settlement process straightforward and transparent, today announced the key results of its 2020 Life Settlement & Retirement Survey. Harbor Life conducted a national survey of 1,702 U.S. adults to better understand people’s knowledge of life insurance benefits and options, with the goal of uncovering insights that help individuals make better decisions around financial and retirement planning.

Overall, Harbor Life’s study revealed that while 70% of U.S. adults have life insurance, there are sizable knowledge gaps among consumers that may be preventing them from understanding the full potential of their policies. Looking specifically at those who have life insurance:

A large portion of life insurance policyholders are not familiar with life or viatical settlements – 43% of people who have a life insurance policy do not know what a life settlement is and 57% do not know what a viatical settlement is.

11% of life insurance policyholders do not know what type of life insurance they have – People in this group are more likely to be unmarried, still working or without children.

  • Single U.S. adults are 150% more likely to now know what type of life insurance they have when compared to married people (20% vs. 8%).
  • U.S. adults without kids are 182% more likely to not know what type of life insurance they have when compared to parents (17% vs. 6%).
  • Working adults are 333% more likely than retired adults to not know what type of life insurance policy they have (13% vs. 3%).

Among the 30% of U.S. adults who don’t have life insurance, affordability and necessity were key themes – When asked, “What is the main reason you do not have a life insurance policy,” respondents answered as follows:

  • 40%: I cannot afford life insurance.
  • 27%: I do not think it is necessary.
  • 13%: I am healthy.
  • 11%: I do not understand it well enough to buy it.
  • 6%: Other
  • 3%: I do not trust insurance companies or agencies.

Younger adults are more likely to not have life insurance because they do not understand it:

  • 12% of working adults said they didn’t understand life insurance well enough to buy it, vs. 4% of retirees.
  • Adults under the age of 55 are 140% more likely to not have life insurance because they don’t understand it vs. adults 55 and older.
  • Millennials are 75% more likely than non-Millennials to not have life insurance due to a lack of understanding.

When asked to choose the main reason they have life insurance, policyholders overwhelmingly chose reasons related to the policy’s death benefit:

  • 37%: To replace my monthly income for my family when I pass away
  • 31%: To pay for my funeral expenses when I pass away
  • 21%: To create an inheritance for my family
  • 9%: To create a source of savings
  • 2%: Other

Large portions of policy holders are unfamiliar with the most vital details of their policies:

  • 43% of policyholders do not know they can sell their policy in a life settlement
  • 57% of policyholders do not know what a viatical settlement is
  • 11% do not know what type of life insurance they have

“These startling numbers show a large percentage of Americans are paying policy premiums each month, but are unaware of the full financial potential of their life insurance coverage, ” said Lucas Siegel, Founder and CEO of Harbor Life Settlements. “At Harbor Life, we recognize the life insurance industry is complex, but we also believe it is vitally important people understand the wide range of financial benefits that come with having a life insurance policy. In fact, we know if Americans took full advantage of life settlements, that benefit alone could cover nearly half of the $300 billion seniors are paying in long-term care costs each year.”

Those Most Eligible Have Least Amount Of Knowledge

When it comes to Americans 55 and older, Harbor Life’s survey shows one in five retired seniors do not feel they have enough money to cover their medical, living and retirement expenses comfortably. In fact, retired seniors are 900% more likely to be concerned about having enough money to cover their expenses when compared to retirees under the age of 55. Additionally, the largest consumer knowledge gap around life and viatical settlements resides with seniors. Sixty-three percent of seniors do not know what a life settlement is, compared to 53% of people 54 or younger, and 75% of seniors do not know what a viatical settlement is, relative to 66% of non-seniors.

“These findings are unfortunate considering seniors are the most likely group to be eligible for a life settlement. Also knowing 20% of retired seniors are struggling to comfortably cover their expenses, while more than two-thirds of them still carry an active life insurance policy, makes it imperative that we close the knowledge gaps discovered in our study,” added Siegel. “We view these findings as an opportunity to work closely with both consumers and financial advisors to improve knowledge and awareness around life settlement options and other living benefits of life insurance.”

For additional survey findings related to consumer motivations for having a life insurance policy, measurements of how life insurance needs evolve over one’s life, what factors prevent Americans from buying life insurance policies, and more please click here.

 

 

 

About Harbor Life Settlements
Harbor Life Settlements is a life settlement company that is dedicated to helping seniors and the terminally or chronically ill sell their life insurance policies for maximum cash value so they can comfortably afford their long-term care, medical expenses, retirement, and more. To make the life settlement process easy and transparent, Harbor Life handles all underwriting, paperwork, and legal matters associated with the sale of a life insurance policy, and works with a large network of fully-licensed life settlement brokers and providers to guarantee the highest cash offer for every client. To learn more, please visit harborlifesettlements.com.