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.
COVID confusion
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.
Methodology
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