AIG life insurance study finds Americans fear
chronic illness more than running out of money or dying young; a
majority would feel abandoned if their partner died uninsured
AIG Life & Retirement launches educational
site to help close life insurance knowledge gap
Seven in ten Americans (70 percent) say life insurance will
protect their ability to live a long, financially secure life,
according to the AIG Life Insurance IQ Study. And yet roughly half
of respondents (51 percent) do not have life insurance or are
unsure if they do, leaving themselves and their families vulnerable
to considerable financial risks.
“Just as it’s important to understand how to build a budget, pay
down debt and save for the future, individuals need to recognize
life insurance and the protection it provides as critical
components of a secure financial plan,” said Adam Winslow, Chief
Executive Officer of Life Insurance at AIG Life & Retirement.
“Yet, an alarming knowledge gap persists when it comes to
understanding how life insurance can solve for financial challenges
beyond leaving a legacy and taking care of loved ones after you’re
Top Findings from AIG Life Insurance IQ
The survey uncovered important knowledge gaps and misconceptions
about life insurance:
1. People do not understand how much their policy is
worth: Even among those with life insurance, 28 percent don’t
know the value of their own workplace policy, and 25 percent don’t
know the value of their own individual policy. Similarly, spouses
are left in the dark: 42 percent don’t know the value of their
spouse’s workplace policy, and 25 percent don’t know the value of
their spouse’s individual policy.
2. How term life insurance works is not widely known:
More than half (54 percent) indicated they did not know whether the
death benefit for term life insurance is set at a fixed amount (for
example, a $250,000 policy) and does not change. Nearly all term
life insurance purchased in the United States is level term, where
the size of the policy stays at a fixed level for the length of the
3. Life insurance is not thought of to address illness
concerns: Facing longer life spans, Americans say their top
fear is getting diagnosed with a chronic illness (40 percent)
versus running out of money as they age (34 percent) or
unexpectedly dying young (25 percent). With so much stress about
illness, living benefits available in certain life insurance
policies could help alleviate the anxiety, yet:
- 88 percent of respondents don’t understand the cost
implications of a private nursing home room.
- Three-quarters (75 percent) do not know that permanent life
insurance can be used to cover long-term care costs. This can be
achieved several ways, including accessing the policy’s cash value,
taking out a policy loan or through a rider, such as a chronic
illness rider, that allows a policy owner to access a portion of
their death benefit while still living.1
- Over eight in ten (83 percent) respondents do not know that a
chronic illness rider can be used to help cover costs associated
with severe cognitive or physical impairments.
4. The full benefits of permanent life insurance are not
recognized: While the primary purpose of life insurance is the
death benefit, most Americans (92 percent) don’t realize the full
range of benefits permanent life insurance can offer during their
lifetime. Top misunderstandings include:
- Americans fail to recognize key features of permanent life
insurance, with few spotting benefits such as withdrawing from the
cash value (27 percent), saving for the future (25 percent), taking
out a loan (21 percent) and building tax-deferred supplemental
retirement income (17 percent).
- Nearly two-thirds (64 percent) are unaware that the cash value
of some policies can grow tax-free while protecting against loss.
These life insurance policies have what’s called a cash value,
which are designed to grow at a guaranteed rate of return.
The study also revealed interesting and changing perspectives on
how people think about life insurance:
1. People have broadened their view of who needs life
insurance: Some misconceptions that used to deter Americans
from recognizing the need for life insurance have faded with the
times. Now, people say that life insurance isn’t only for
breadwinners, parents of youngsters or married couples.
- 90 percent believe that stay-at-home parents can benefit from
life insurance, and 80 percent believe that the primary earner
shouldn’t be the only household member with life insurance.
- 88 percent believe that you still may need life insurance after
your kids turn 18.
- 78 percent say singles may also benefit from life
2. Couples say they’d feel abandoned if their partner died
uninsured: Looking out for loved ones financially can be felt
as an expression of commitment and love. Perhaps this is why more
than half of Americans (52 percent) say they would feel abandoned
if their partner died without life insurance.
3. Partners share a similar approach to life insurance:
How one half of a couple handles their life insurance can be a good
predictor of what their partner does: 83 percent of respondents
with life insurance say their partner is covered as well, while 70
percent of respondents without life insurance say their partner
also doesn’t have a policy.
4. Many want to leave life insurance to man’s best
friend: While many would use life insurance to protect their
children (49 percent) or spouse (47 percent), pets (18 percent)
surprisingly took third place on America’s priority list, with
slightly more looking to leave a legacy to their pets than to their
grandchildren, parents, siblings or friends. This is particularly
pronounced among younger generations with a third of Gen Z (34
percent) saying they’d want to provide for their pet.
5. That life insurance can help solve financial problems
beyond leaving a legacy: Only one in five (21 percent) would be
most motivated to buy life insurance to help build a supplemental
retirement income stream for themselves or to cover costs related
to cognitive or physical decline (23 percent), whereas 45 percent
view life insurance as a tool to leave money to their loved
Working with an Advisor Can Boost Life Insurance
The study also found that Americans who work with a financial
advisor are more likely to have a life insurance policy (72
percent), compared to those without an advisor (46 percent).
Additionally, those with an advisor demonstrated a better
understanding of the details around life insurance:
- Access to Cash Value: 73 percent of those with a
financial advisor vs. just 56 percent of those without one
understand you can take cash withdrawals from some life insurance
during your lifetime.
- Leave a Legacy: 72 percent of those with a financial
advisor vs. 57 percent of their counterparts know you can leave
life insurance proceeds to a charity.
- Stay in the Green: 56 percent of those with a financial
advisor vs. 34 percent of those without one know that the cash
value of some life insurance policies can grow tax free while
protecting against loss.
Financial advisors still have work to do in explaining several
misunderstood concepts, such as the fact that term life insurance
does not allow you to build a cash value—a fact that 61 percent of
those with an advisor still did not know.
“Life insurance is a valued asset that can help safeguard
against difficult scenarios like dying too young, outliving your
savings or getting sick along the way—the ones no one wants to
think about, but we need to prepare for,” added Winslow. “Working
with an advisor helps boost Americans’ financial confidence and
readiness to take on the future.”
For educational materials to close the life insurance knowledge
gap, visit www.aig.com/LifeIQ.
AIG Life Insurance IQ Study Methodology
This AIG Life Insurance IQ Study was conducted by Morning
Consult from December 2-5, 2019, among a national sample of 2,201
adults. The interviews were conducted online, and the data were
weighted to approximate a target sample of adults based on age,
race/ethnicity, gender, educational attainment and region. Results
from the full survey have a margin of error of plus or minus 2
About AIG Life & Retirement
AIG Life & Retirement, a division of AIG (NYSE: AIG), brings
together a broad portfolio of protection, retirement savings,
investment and lifetime income solutions to help people achieve
financial and retirement security. The business consists of four
operating segments – Individual Retirement, AIG Retirement
Services, Life Insurance and Institutional Markets – and holds
longstanding, leading market positions in many of the markets it
AIG Life & Retirement includes AIG member insurance
companies American General Life Insurance Company (Houston, TX),
The United States Life Insurance Company in the City of New York,
and The Variable Annuity Life Insurance Company (VALIC), Houston,
TX as well as their affiliates. Securities products are distributed
by AIG Capital Services, Inc., member FINRA. Additional information
about AIG Life & Retirement can be found at
American International Group, Inc. (AIG) is a leading global
insurance organization. AIG member companies provide a wide range
of property casualty insurance, life insurance, retirement
solutions, and other financial services to customers in more than
80 countries and jurisdictions. These diverse offerings include
products and services that help businesses and individuals protect
their assets, manage risks and provide for retirement security. AIG
common stock is listed on the New York Stock Exchange.
Additional information about AIG can be found at www.aig.com |
YouTube: www.youtube.com/aig | Twitter: @AIGinsurance
www.twitter.com/AIGinsurance | LinkedIn:
www.linkedin.com/company/aig. These references with additional
information about AIG have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release.
AIG is the marketing name for the worldwide property-casualty,
life and retirement, and general insurance operations of American
International Group, Inc. For additional information, please visit
our website at www.aig.com. All products and services are written
or provided by subsidiaries or affiliates of American International
Group, Inc. Products or services may not be available in all
countries and jurisdictions, and coverage is subject to
underwriting requirements and actual policy language. Non-insurance
products and services may be provided by independent third parties.
Certain property-casualty coverages may be provided by a surplus
lines insurer. Surplus lines insurers do not generally participate
in state guaranty funds, and insureds are therefore not protected
by such funds.
1 In order to access accelerated benefits
from a chronic illness rider, the insured must first be certified
as chronically ill by a licensed health care practitioner.
version on businesswire.com: https://www.businesswire.com/news/home/20200310005470/en/
Sabra Purtill (Investors): 212-770-7074; email@example.com
Matt Burkhard (Media): 212-458-4253; firstname.lastname@example.org
Historical Stock Chart
From Jul 2020 to Aug 2020
Historical Stock Chart
From Aug 2019 to Aug 2020