Life Happens, NAIFA’s consumer-education arm, has collaborated for the 14th year with LIMRA to conduct the 2024 Insurance Barometer Study. The findings reveal a great opportunity for financial professionals to educate Americans about the importance of life insurance and dispel some of the myths and misunderstandings that contribute to a life insurance need-gap in the United States. As we wrap up April, National Financial Literacy Month, it’s a great time to remember that an important part of being a financial professional involves improving the financial literacy of clients and consumers.
But let’s drill down on that. The study also found that 72% of consumers overestimate the true cost of life insurance. More than half said they based their insurance cost estimate on “gut instinct” or a “wild guess.” It’s fair to assume most of them have not consulted a NAIFA member.
There is obviously a critical role for insurance and financial professionals to improve the public’s understanding of life insurance products and help them find solutions that fit their budgets. This presents opportunities in multiple communities. Demographic groups most likely to say they need insurance or more insurance include: households earning less than $50,00 per year (56%), Hispanic Americans (53%), Black Americans (49%), Gen Z (49%), and women (45%).
Retirement Worries
The study reveals areas beyond life insurance where financial professionals can have a positive influence on the public’s financial literacy and address their money concerns. Millennials expressed the highest level of financial uneasiness among the generational groups, with 54% worrying that they won’t have enough money for a comfortable retirement. This is a concern shared by Gen X (48%), Gen Z (43%), and to a lesser extent Baby Boomers (29%).
Consumers who understand money matters and have high financial IQs make great clients. They know the value of risk-protection products, retirement planning, and providing financial legacies. It benefits everyone to have talented, ethical financial professionals like NAIFA members on the front lines of our struggle to increase financial literacy. Without you, the statistics would be much bleaker. Many more families would be unprepared, unprotected, and more anxious. I would like to personally thank you for the great work you are doing.