Survey also finds widespread confusion over whether/how COVID-19 affects ability to get life insurance, and percentage of people who name dogs and cats as beneficiaries (but that’s probably not the best idea)
ERIE, Pa., Sept. 14, 2020 /PRNewswire/ — Life insurance can pay for final expenses and provide financial security for loved ones left behind, but a new national survey from Erie Insurance shows many people are confused about it. Large percentages of respondents were unsure how various occupations and health conditions might affect who can or can’t get life insurance, and many significantly overestimated the cost. Respondents also shared the reasons they first got life insurance, and the reasons they do – or don’t – have it now.
“Getting a life insurance policy is one of the most important things a person can do to take care of their families and yet, it’s a topic that many people don’t want to think about. As a result, there is a lot of confusion about it,” said Lou Colaizzo, senior vice president, Erie Family Life. “Erie Insurance commissioned this survey to help raise awareness of the benefits of life insurance and to take some of the mystery out of it.”
Reasons for not having life insurance
When asked why they don’t have life insurance, almost four in 10 (38%) said it would be too expensive. However, the survey suggests most people probably overestimate the cost. For example, at Erie Insurance, a 20-year, $250,000 term policy would cost roughly $200/year for a healthy 30-year-old male and $185 for a healthy 30-year-old female.* But more than half of respondents (56%) estimated it would cost $300/year or more, including 10% thinking it would be $500/year and 11% guessing it would be more than $500/year.
Reasons and motivations for having life insurance
Of those who have purchased life insurance, people were asked to list their one or two top reasons for doing so. The top five reasons were:
- To have money to leave as an inheritance for loved ones 37%
- So my loved ones would have money to pay for my funeral expenses 37%
- So my spouse and/or children would have enough money to maintain our
current standard of living without my income 32%
- So my loved ones could pay my debts 17%
- So my spouse and/or children could keep our current home 10%
When asked which life event first motivated them to buy a life insurance policy, 38% said no particular life event had motivated them. But of those who were motivated by a life event:
- 20% said it was that they got married;
- 20% said it was that they had a child, and
- 14% were motivated to buy life insurance after they bought a home.
Four in 10 people (41%) said they don’t know whether people who have had COVID-19 can get life insurance. 10% of respondents believe people who have had COVID cannot get life insurance.
In fact, many insurance companies have developed specific questionnaires related to COVID-19. A person who had tested positive but had been asymptomatic may see no impact on their ability to get life insurance, whereas a person who had tested positive and been hospitalized may.
Other health matters
The majority of people know that certain health conditions affect the price of a life insurance policy, but there is some uncertainty. For example, 65% of people accurately said that insurance companies consider if a person has high blood pressure when determining the price of a policy, but 15% thought they don’t and one in five (20%) weren’t sure.
Many people were also unsure about how a history of cancer might affect someone’s ability to get life insurance. Almost one in five (19%) think a person who has had cancer cannot get life insurance, while 37% don’t know whether they could or not.
In fact, cancer, along with other past serious conditions like a heart attack or stroke, often will not disqualify a person from getting life insurance. Erie Insurance considers the type and severity of the illness, the time that has elapsed since the diagnosis, and current medications or treatment regimen when determining if a person is eligible for a life insurance policy.
Taking care of Max and Luna*
Most people name their spouse (59%) or child/children (38%) as their life insurance policy beneficiaries, but some people want to take care of their furry friends who are left behind. 10% listed their dog as their beneficiary while 4% listed their cat. (*Max and Luna are the among the most popular dog and cat names in the U.S.) In fact, a person cannot literally name a pet. Anyone wishing to do this should consult with their insurance agent to ensure the policy is set up properly.
Whether it’s a question about whom to name as a beneficiary, what type or how much life insurance to have, or how different health conditions or occupations may affect life insurance, Erie Insurance’s Lou Colaizzo says the best thing to do is talk with your insurance agent about it.
“Just as with any type of insurance, what’s right for your neighbor may not be right for you,” said Colaizzo. “Your agent can help you determine the best life insurance policy for you and your family based on your individual circumstances and needs.”
For more results from the Erie Insurance life insurance survey, see this infographic.
*The insurance products and rates, if applicable, described in this article are in effect as of September 9, 2020 and may be changed at any time. Rates for a particular product will be determined by underwriting at the time of application.
This survey was conducted online by Falls on behalf of Erie Insurance, from July 10 through July 15, 2020, among 650 U.S. residents ages 19 and older. Falls established the sampling quotas, designed the questionnaire, tabulated the survey responses, and managed the overall project. Falls used Dynata (Plano, TX) to administer the survey via the internet, including mobile devices, to Dynata’s captive U.S. panels who met the age, gender, income, and regional demographic criteria.
About Erie Insurance
According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 11th largest homeowners insurer and 12th largest automobile insurer in the United States based on direct premiums written and the 16th largest property/casualty insurer in the United States based on total lines net premium written. The Group, rated A+ (Superior) by A.M. Best Company, has nearly 6 million policies in force and operates in 12 states and the District of Columbia. Erie Insurance Group is a FORTUNE 500 company.
ERIE® life insurance products and services are provided by Erie Family Life Insurance Company (home office: Erie, Pennsylvania). Erie Family Life Insurance Company is not licensed to operate in all states. Go to erieinsurance.com for company licensure information. Life insurance products are not available in New York. News releases and more information about Erie Insurance Group are available at www.erieinsurance.com.
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SOURCE Erie Insurance Group