In last week’s Marketing Corner, we discussed the value of life insurance awareness month and how consumers greatly underestimate the cost of life insurance. This week we wanted to present interesting statistics that you can use as you discuss life insurance with your prospects. These stats give you insight on a variety of topics, including the cost of college, mortgages, and long-term care. These details are important because life insurance can be used to cover many of these expenses, especially in the case of blended products with regards to long-term care. 

Life Insurance

According to the latest Insurance Barometer study from Life Happens:

One out of three households indicated they would have immediate trouble handling living expenses with the loss a primary breadwinner.

The majority of people prefer to buy life insurance in person. Only 1 in 5 prefer to apply online.

The median estimate for a 250,000 term life policy was more than twice the actual cost.

The top three financial concerns for consumers is having enough money for a comfortable retirement, paying for long-term care, and paying for medical expenses.

A 2016 Gallup poll finds that the top concern is not being able to pay medical costs of a serious accident or illness. All concerns addressed by the poll have risen since it was conducted in 2015.

A 2015 Bankrate Money Pulse survey found the while around 6 in 10 individuals reported having some form of life insurance, nearly half may be underinsured.

Banks often use life insurance on key personnel to fund employee benefits and as a tax shelter for assets. More than half of U.S. banks hold some form of bank-owned life insurance assets, according to a review of FDIC data from 2013.

College
According to the College Board, the average published yearly tuition and fees for a public four-year university is $9,410. Assuming a student graduates on time, the base cost will be $37,640. This doesn’t account for other expenses like housing, food, and books. And, according to a 2014 report by Complete College America, most students don’t graduate in four years.

A private four-year university will of course be more expensive. The College Board averages $32,410 a year for private colleges. Assuming a four-year graduation period, this amounts $129,640, or a little over half the total cost of raising a kid.

Mortgage/Home

80% of Americans have some form of debt. Of these, 44% have mortgage debt.

The median home loan balance is just over $100,000.

Long-term Care

According to longtermcare.gov, in 2010 the average cost of a semi-private room in a nursing home was $6235 per month, care in an assisted living facility was $3,293 per month, and $21 per hour for a home health aide.

Genworth, in a study conducted with CareScout of April of 2016 finds that the national medians for monthly care have risen since the government stats of 2010. For instance:
care in an assisted living facility is $3,628
care in a semi-private room is $6,844.

Consumers underestimate the cost of home healthcare by nearly fifty percent.

**This post is part of Legacy Financial Partners’ ongoing Marketing Corner, a space that offers advisors short sales ideas, yellow-pad concepts, and alerts to aid advisors in lead conversion, marketing, and client relationship building.