How to help individuals build financial confidence with today’s life insurance solutions
by Andy Gordon & Jessica Vanscavish
Andy Gordon is Head of Life Insurance, Financial Protection & Retirement Solutions, and Jessica Vanscavish, Head of Disability, Absence, Life, and Supplemental Health, Group Benefits, Guardian.Life insurance can serve as a vital tool for helping Americans build financial confidence and be prepared in case of the unexpected. Yet despite many Americans expressing concern with being financially ready in the event of a loss, few make the connection to how life insurance can provide protection.
According to research from Guardian, although eight in ten Americans worry about their financial preparedness for an unexpected loss, just 18% say that life insurance is an extremely important benefit. For financial professionals, benefit brokers, and HR leaders, this disconnect represents an important chance to educate individuals about the life insurance options available to them and how these solutions can meet their financial wellness needs today and long into the future.
Bridging The Life Insurance Awareness Gap
Some individuals may not think they need life insurance because they have no financial dependents. Others may face competing financial priorities, while both overestimating the cost and underestimating the value that life insurance offers.
What’s more, significantly more people cite burial and other final expenses (67%) as a reason to own life insurance than those who cite transferring wealth or leaving an inheritance (45%). These numbers indicate that many Americans aren’t fully aware that beyond final expenses, life insurance is about recouping from potential income loss, providing an income stream, paying off debt, and ensuring a comfortable future for those who matter most to them.
As Americans continue to turn to their workplace benefits to support their financial wellness, employer-provided life insurance remains a popular option and important foundation. Six in ten employers offer coverage, and nearly nine in ten cover some or all of the cost. Nonetheless, many Americans may be unaware that they could need more than what is available through their workplace policy.
Amid these misconceptions about life insurance, most households that experience the premature death of a primary wage earner are ultimately left financially unprepared for the future. In fact, 81% of those who lost their spouse five or more years ago still feel they have not fully financially recovered
Meeting Concerns Through Life Insurance Solutions
Misconceptions about life insurance underscore just how vital a role financial professionals, benefit brokers, and HR leaders play in educating individuals about modern life insurance options and helping them select the right coverage.
In guiding individuals through life insurance conversations, focusing on their most pressing short- and long-term financial concerns that life policies can help address can be impactful, including:
- Building a strong foundation for financial protection: Just three in ten Americans self-report excellent or very good financial health, and more than a third (38%) say they’d face financial hardship without the benefits they get through work. Helping individuals better understand any life insurance coverage they may already have through an employer, and how individual policies can complement these offerings, is key to building a strong financial foundation moving forward.
- Mitigating costs around eldercare: With 37% of Americans concerned about how to afford eldercare for themselves and their spouses, consider optional riders on policies that can help with benefits during their lifetime.
- Supporting emergency savings: Forty-two percent of Americans worry about not having sufficient emergency savings to pay for unexpected expenses. Yet they may be unaware that whole life insurance policies can offer built-in solutions to address this concern through the cash value component, which acts as a pool of money that is accessible if needed in an emergency.
- Providing stability for the future: With high inflation, rising costs, and a volatile market among Americans’ major financial concerns, only 28% say they don’t panic when their investments hit a bad patch. Given this reality, it’s important for financial professionals to let clients know that whole life policies can also act as a non-market-correlated asset, providing stability even in uncertain times.
Building Confident Financial Futures For Clients
Closing the life insurance knowledge gap requires proactive guidance. By reframing misconceptions and highlighting how product features help address Americans’ top concerns, along with the important role of employer-provided offerings, individuals can come to see life insurance as a cornerstone of their long-term financial wellness.
Whether talking to a client, advising employers, or speaking with employees, there’s no better time to start the conversation and set individuals on the path to strong financial wellness.
