Coming Up Short

American Demographics,  May 1, 2002  by Sandra Yin

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Byline: SANDRA YIN

Today, the average American can expect to live 77 years, up from 47 years for those born in 1900. The events of Sept. 11, however, were a sober reminder that those years are not guaranteed. Yet even after the tragedy, the vast majority of working-age Americans say they are more concerned about their financial well-being than they are about their own mortality, according to recent survey.

The study, the "Report on American Priorities," includes the comparative findings of two nationally representative surveys commissioned by Minneapolis-based Allianz Life Insurance Company of North America and conducted by Washington, D.C.-based SWR Worldwide. The first poll, conducted in August 2001, surveyed 800 Americans, ages 25 to 45, about their attitudes regarding financial security and life insurance; the second poll surveyed another 400 Americans in the same age bracket in January 2002, to gauge attitude shifts post-Sept. 11. The results of both surveys were released in January.

Sept. 11 aftershocks certainly altered some people's attitudes toward their own mortality, but less than researchers expected. After Sept. 11, 62 percent of respondents say their financial well-being is a greater concern than their mortality, down only 10 percentage points from those who said the same in August 2001.

Of those who are more concerned about financial well-being, 30 percent consider their current financial situation to be stressful. An additional 27 percent say they are concerned about their family's future financial security. When asked to choose one out of four hypothetical experiences that would have the greatest financial impact on them over the next five years, 53 percent of respondents selected the "inability to work due to serious illness."

Given the overriding concern about financial well-being, it's not surprising that consumers say they would welcome the development of products that would help tide them over if hard times hit. In fact, three-quarters of respondents say they somewhat or strongly agree that life insurance policies should offer access to money for setbacks other than death. Almost half (47 percent) of respondents say they would purchase a wealth management tool that paid them or their family a benefit in the form of a lump sum payment in the event of a serious illness. Ironically, only half (52 percent) say they already have disability insurance, and only 1 in 3 has long-term care insurance.

The study's findings show that financial setbacks could easily catch Americans off guard, since people tend to underestimate their level of preparedness in a crisis. Two-thirds of respondents to the survey say they are somewhat or very prepared financially in the event of serious illness, accident or death. Yet when asked how many months they believe they could sustain their current standard of living after such an event, 58 percent say they would need financial assistance after less than six months. About 38 percent say they would need help after less than three months, and 13 percent would need assistance within a month.

For more information, contact Barb Hemberger at (952) 346-6232.

MAKING DO

In the event of a financial setback, more people would rely upon savings and disability insurance.

IF YOU OR SOMEONE IN YOUR IMMEDIATE FAMILY HAD TO DEAL WITH A FINANCIAL SETBACK DUE TO A SERIOUS ILLNESS OR ACCIDENT, WHICH OF THE FOLLOWING SOURCES WOULD YOU TURN TO FOR THE MAJORITY OF YOUR FINANCIAL SUPPORT?

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