Americans attracted to additional benefits if asked more directly
October 30, 2013 – MINNEAPOLIS–(BUSINESS WIRE)–When given a list of reasons to buy life insurance, only 4% of respondents to a recent survey from Allianz Life Insurance Company of North America (Allianz Life) ranked “access to money for expenses like supplementing college funding, healthcare, emergencies, or supplemental retirement income” as a top reason. However, if asked more directly about these additional benefits, 64% of them indicated they would make a sacrifice to have a life insurance policy with such benefits. The results indicate more education or better explanation of these benefits would enhance Americans’ interest in life insurance.
The Allianz Life 2013 Life Insurance Perspectives Study* evaluated why Americans buy life insurance. When asked to rank the most important reasons for owning life insurance, more than 80% of respondents recognize the traditional death benefit as the primary purpose for purchasing. The majority of respondents selected either “replace lost income when insured dies” (35%), “pay for final funeral/probate expenses” (28%) or “pay off mortgage/debt” (18%) – as their top selection.
However, when asked specific questions about additional benefits, many Americans said they would want life insurance with those benefits. More than six in 10 (64%) respondents indicated they would make a sacrifice to have a life insurance policy with additional benefits (described as access to available money to help fund college education, supplement retirement income or assist if they became chronically ill). A quarter of respondents said they would “eat out less often,” followed by those who said they would give up “driving a more expensive car” (12%), “my morning cup of coffee” (12%), “my next cell phone upgrade” (8%) and “my next planned vacation” (5%).
Education needed on additional benefits
“People still appreciate the ability for life insurance to assist with an unexpected death, but this study shows clearly that more education is necessary about the value and availability of additional benefits within some life insurance policies,” said Allianz Life Vice President of Advanced Markets Deb Repya. “Several options are available today beyond traditional term and permanent policies, so it’s important that the industry continues to spread the word about the versatility of modern life insurance.”
When presented with examples of additional benefits available through some life insurance policies, “access to money if I become chronically ill” was the most popular option with 62% of respondents noting it as the most valuable benefit. Half of all respondents said “access to available money to supplement retirement income” was most valuable, followed by those who chose “access to money to help fund college education” (22%) as their top selection.
The survey also uncovered a gap between when people think they may need to utilize life insurance benefits, such as income replacement, and reality as reported by the U.S. Census Bureau. When asked what they believe is the average age of widowhood for both men and women in the United States, the median response was 72 years old for men and 70 for women. Both answers are a full 10 years later than the actual age of widowhood for both sexes, estimated to be age 59.4 (U.S. Census Bureau, May 2011).
About Allianz Life
Allianz Life Insurance Company of North America, one of FORTUNE’s 100 Best Companies to Work For in 2013, has been keeping its promises since 1896. Today, it carries on that tradition, helping Americans achieve their retirement income and protection goals with a variety of annuities and life insurance products. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with 142,000 employees worldwide. More than 78 million private and corporate customers rely on Allianz knowledge, global reach, and capital strength to help them make the most of financial opportunities.