RADNOR, PA — Consumers report that taking care of their families financially is a top priority, yet 68% are prioritizing other financial goals or investments ahead of life insurance, according to new research from Lincoln Financial Group1 (NYSE: LNC). During Life Insurance Awareness Month throughout September, Lincoln Financial is offering three actions consumers can take now to make life insurance a priority.
According to Lincoln’s 2023 Consumer Sentiment Tracker1, 80% of U.S. consumers surveyed say making sure their family is taken care of financially if they pass away is a financial priority, including 20% who say it is their number one financial priority. Yet, only 8% of respondents who don’t currently own life insurance plan to purchase or enroll in it over the next five years.
“There are still misconceptions that the value of life insurance is only accessible once a death certificate is in-hand, but there are a variety of living benefits that life insurance can provide to help families secure their financial futures, including protection and accumulation potential,” said Matt Grove, executive vice president and president of Retail Solutions at Lincoln Financial.
In fact, despite the variety of living benefits life insurance provides, 53% of those surveyed believe it doesn’t become useful until after they die and less than half of consumers would expect to use life insurance for various financial goals, such as long-term care, education expenses, retirement, or growing wealth. 1
“We have an opportunity to help people learn what’s really available so they can make choices that are right for them and their families,” said John Kennedy, executive vice president, chief distribution and brand officer at Lincoln Financial. “Life Insurance Awareness Month can be the nudge consumers need to learn more about life insurance and its many forms of financial protection and wealth accumulation, so they can better understand its value and prioritize it in their financial planning.”
To recognize the 20th anniversary of Life Insurance Awareness Month, Lincoln Financial suggests taking the following actions as part of a financial plan for your future:
1. Determine what is most important to you and your family.
It’s important to know your financial goals before you begin identifying what tools can be used to help achieve them. For example, consumers surveyed identified minimizing future taxes (80%), saving for retirement outside of a workplace plan or IRA (76%) and saving for education expenses for children (48%) as current financial priorities, yet less than 46% are aware that each of these can be supported by life insurance. 1 Lincoln Financial encourages all consumers to identify their own financial priorities, both short- and long-term, as the first step in developing a financial plan.
2. Understand the range of options that may be available.
When deciding when and where to purchase life insurance, consumers should consider all of their options. Today’s life insurance market offers diverse solutions across various price points so consumers can tailor coverage to help meet their specific needs. Permanent life insurance offers the opportunity to accumulate cash value that can be withdrawn tax-free. Adding cash-value life insurance to a portfolio can help protect savings and provide tax-deferred growth opportunities, all while protecting a family’s financial future.2
One option for many consumers is to simply take advantage of their employer and workplace benefits programs.
“As workplace open enrollment season gets underway, now is the perfect time for consumers to understand the options offered through their employer and determine how life insurance fits into their holistic financial plan,” said Jimmy Reid, executive vice president, president of Workplace Solutions at Lincoln Financial.
3. Ask for help.
Financial planning is an essential part of reaching financial goals and talking with a financial professional can make a big difference. As consumers identify their financial goals and better understand how life insurance can support them, a financial professional can help build a comprehensive life insurance strategy, whether that’s through an individual policy, coverage provided by their employer or both. Lincoln Financial offers a convenient tool to help consumers find a financial professional to help them reach their goals.
For more information about life insurance, Lincoln Financial offers the following online resources:
1 Perspectives on Life Insurance, Lincoln Financial Group Research, 2023.
2 Distributions are taken through loans and withdrawals which reduce a policy’s cash surrender value and death benefit and may cause the policy to lapse. Loans are not considered income and are tax free. Withdrawals and surrenders are tax-free up to the cost basis, provided the policy is not a modified endowment contract (MEC). A MEC policy is one in which the life insurance limits exceed certain high levels of premium, or the cumulative premium payments exceed certain amounts specified under the Internal Revenue Code. For policies that are MECs, distributions during the life of the insured, including loans, are first treated as taxable to the extent of income in the contract, and an additional 10% federal income tax may apply for withdrawals made prior to age 59½.
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