25 January 2022

Americans Overconfident But Underprepared For Unexpected Death

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American civilian and military families may talk about and prioritize life insurance and end-of-life planning, but a new USAA Life Insurance Company survey uncovered a preparedness gap for many.

Contemplating the loss of a loved one is not a welcome topic for many as the survey found that more Americans would rather talk about politics than planning for an unexpected death (68 vs. 62%). 

And that’s not the only disconnect.

The majority of respondents (74% of civilians and 84% of military family participants) believe their family would be financially secure in the event of their death. However, when asked how long their family would be able to afford basic living expenses (i.e., mortgage/rent, childcare, etc.) if the primary financial provider died, 40% of civilian families and 27% of military families say they couldn’t survive financially for more than one year.

Also, nearly half of Americans (47%) believe money is the most important thing to leave your family when you pass, and life insurance is seen as the most important instrument when passing wealth down in the family (31%). Unfortunately, less than half (46%) of Americans have life insurance.

Barriers, disparities affect end-of-life planning 

The survey also identified several barriers and disparities to life insurance and financial end-of-life planning such as:

COST: An unclear or perceived high monthly cost is a contributing factor to why most Americans do not have life insurance. Civilians shy away from it because they believe it costs too much (30%), while 29% of military family respondents feel they have sufficient resources and don’t need it.

GENDER DISPARITIES: Female respondents across both audiences (civilian and military families) are more likely to have less life insurance than their partner (38%) when compared with males (11%). Females (65%) are also at a greater risk of financial instability (reporting being able to keep up with basic living expense payments for only five years or less) in the event of an unexpected death than their male counterparts (51%)

RACIAL INEQUITY: Hispanics and Blacks are at greater risk (71% and 76%) than whites (52%) of financial instability in the event of an unexpected death.

“Life can’t wait. It’s important to protect your family today so that if the unexpected happens, their primary focus can be supporting one another,” said Brandon Carter, president of USAA Life Insurance Company, who recommends having enough life insurance to pay off all debt and be able to replace income for at least five years.

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