Nearly half of single parents with children under age 18 don‚Äôt have life insurance, and the majority of them say the reason they don‚Äôt have coverage is because they believe it‚Äôs too expensive.
That was one of the findings of a recent survey conducted by PacWealth Solutions.
The survey showed that the lack of life insurance is particularly acute among single parents who have three or more children under age 18, with 70 percent of this group saying they have no coverage.
The reason for not having life insurance, according to the survey, is that single parents believe it costs too much. Fifty-eight percent of those who do not have coverage said they believe it‚Äôs too expensive.
‚ÄúLogically, you would think single parents would need life insurance the most,‚ÄĚ said Nelson Lee, PacWealth Solutions managing partner.
However, he acknowledged, single parents ‚Äúnot only have competing financial priorities but things competing for their attention, their energy, their time,‚ÄĚ leaving the life insurance purchase far down the to-do list for this group.
Those surveyed thought the cost of life insurance is too expensive, but the majority of those who did have life insurance were willing to shell out more money to buy permanent life coverage instead of term. The survey showed 77 percent of those who owned life insurance had permanent coverage.
‚ÄúSo this is telling us that people say life insurance is too expensive but they are buying the more expensive coverage,‚ÄĚ Lee said. ‚ÄúThey are saying one thing but doing another.‚ÄĚ
Mistrust of advisors also factored in to the decision to pass on buying life insurance, the survey showed.
‚ÄúOnly 17 percent said they made their insurance purchase decision based on a broker‚Äôs recommendation,‚ÄĚ Lee said. ‚ÄúThe overwhelming majority said they do their own research.
‚ÄúI think that means we as an industry need to do a better job of proactively giving people quality information and letting them feel confident about what their advisor is recommending.‚ÄĚ
Few of the survey respondents said they were prompted to buy life insurance by traditional life markers such as buying a house, getting married or having a child. Only 12 percent said marriage would prompt them to buy life insurance, 4 percent said they would buy it because they bought a house and 2 percent said they would buy it after having a child.
But 20 percent of those polled said they would buy life insurance if it were easy to do so through their employer.
‚ÄúThis was surprising because people don‚Äôt ask about life insurance in the workplace,‚ÄĚ Lee said. ‚ÄúThis is an opportunity for advisors to form good relationships with business owners and sell policies through them.‚ÄĚ
About one-third of survey respondents said poor inheritance management had caused a major rift in their families. Lee said this is another opening that advisors can use to start the life insurance discussion with prospects.
More than half of the survey respondents were born prior to 1976, and this group is buying permanent life insurance for savings purposes, Lee said. ‚ÄúThis tells us a lot of buyers are not looking at life insurance purely as an insurance vehicle, but for retirement or inheritance management.‚ÄĚ
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at [email¬†protected]. Follow her on Twitter @INNsusan.
¬© Entire contents copyright 2019 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.