According to a survey by LearnVest and The Guardian Life Insurance Company of America (“Guardian”), our nation’s 20- and 30-somethings are very aware of the serious financial obligations they face and feel strongly about not placing unnecessary financial burden on their parents, spouses or partners should anything happen to them. Yet, the survey, called Life and Disability Insurance: What 20- and 30-Somethings Think, also showed that this group of people is uninformed about how to address these concerns.
“The results of this study clearly underscore the need for practical, real life financial literacy and empowerment. We need to address this earlier in our schools, and more often throughout people’s lifetimes,” Deanna Mulligan, chief executive officer of Guardian, said. “There is a serious gap between the expectations of this audience and the reality they face, particularly when it comes to insurance. By filling these information gaps, we can empower young adults to take control of their financial future and reduce the possibility of placing undue financial burden on their loved ones.”
The Guardian plans to launch a financial literacy pilot curriculum at community colleges to empower students to better address their financial needs, Mulligan said.
Key findings from the survey include:
- 93 percent of respondents acknowledge that insurance is important; yet, most lack a basic level of literacy when it comes to insurance in general and even their existing coverage.
- 30 percent don’t know what type of insurance they actually own, and 19 percent don’t know how much their policy would pay out.
- Less than half (47%) of survey respondents have an emergency fund in place.
- Only 35 percent have disability insurance (compared to 57 percent for life insurance).
- 30 percent would rather get their teeth cleaned and 25 percent would rather clean out their refrigerator than go through the process of researching and purchasing insurance.
- Less than a third (27%) would turn to a professional for guidance in order to choose the right insurance policy; the majority of respondents prefers anecdotal information from friends and family, or relies on the internet.