ALLSTATE SURVEY SHOWS MANY NEWLYWEDS LEAVING
FINANCIAL FUTURE TO CHANCE
Recently Married Couples Have Six-Figure Assets, but Lack Adequate
Life Insurance Protection
October 2008 – While newlyweds traditionally receive advice from friends and relatives on secrets for a successful marriage, protecting their financial future is one thing seemingly forgotten in these conversations.
A recent survey by Allstate Insurance Company shows the value of newlyweds’ combined assets is approximately $107,000 on average. However, few newlyweds are actually taking steps to protect their financial future through purchases such as life insurance. The majority of the respondents (61%) did not purchase a policy before marriage, and 64% of those still had not purchased life insurance within the first three years of marriage. In fact, only 23% of these spouses claimed to have bought life insurance during their first year of marriage, and this trend continued in years two (2%) and three (7%).
“Newlyweds have several things to consider in their first year of marriage, one of which should be wealth protection and obligations they are now taking on jointly,” said Jim Hohmann, president and CEO of Allstate Financial, a business unit of the Allstate Corporation. “While many individuals may have life insurance coverage through their employer, most of these policies only cover up to two times a person’s current salary and are not portable from one job to another. In general, individuals should purchase policies that are at least five times their current salary, but that needs to be balanced with the couples’ long-term goals. Newlyweds should meet with a life insurance professional to review all their options and considerations.”
First Anniversary – The “Paper” Gift
The survey also found that 42% of respondents think that life insurance would be a thoughtful and meaningful gift for their spouse. However, just 3% of respondents said they received or would likely receive a card or note to meet with a life insurance agent as an anniversary gift.
“While life insurance may not be a romantic anniversary gift, our survey suggests that couples see it as an important gift,” said Hohmann. “Not having life insurance truly could be a costly oversight. That first year of marriage may be hectic, but newlyweds should set aside time to talk to a life insurance professional and begin planning.”
Allstate offers the following checklist as a guideline when thinking about life insurance coverage:
- Talk to an expert. Work with an Allstate professional to evaluate your financial needs and goals and to determine how much life insurance you and your spouse will need. Each situation is different and it’s important to learn about possible coverage amounts and options.
- Plan for the future. Do you plan on having children? Will you have debts that would need to be paid? Will you have enough to cover your children’s education costs? Will you have aging parents that may need taking care of? All of these common life situations require planning – having life insurance in the event of untimely death can help provide an added layer of protection for these situations.
- Don’t rely on savings alone. Many people do not have enough in their personal savings, and if people don’t have enough saved, their family most likely won’t be able to pay off final expenses or be able to hold onto assets like a home. Life insurance is important to have for that added layer of protection.
- Employer-based coverage is not enough. Typically, group life insurance through an employer isn’t portable – meaning if an employee leaves the job, he or she is probably also leaving the life insurance protection behind. Having an individual life insurance policy purchased through an insurance agent or financial professional, however, will have no effect on the coverage provided by an employer.
Additional Research Findings
The Allstate survey also revealed the following:
· More men (42%) than women (35%) had life insurance beyond their employers’ coverage prior to marriage.
· More than half (53%) of the respondents said purchasing life insurance policies showed a commitment to their future together as spouses.
· More than three-fourths (77%) of respondents gave their spouse a first anniversary gift.
· While the traditional first anniversary gift is paper, two-thirds of respondents did not follow tradition when giving an anniversary gift to their spouse.
For more information on life insurance, contact Allstate agent Mary Kelnhofer at 704-794-9777, or via email at MaryKelnhofer@allstate.com.
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*Survey of 1070 men and women who have been married between 1 and 3 years conducted by Impulse Research in August 2007 on behalf of Allstate®. Respondents were not informed that the survey was being conducted on behalf of Allstate®.
The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer. Widely known through the “You’re In Good Hands With Allstate®” slogan, Allstate is reinventing protection and retirement to help individuals in approximately 17 million households protect what they have today and better prepare for tomorrow. Customers can access Allstate products and services such as auto insurance and homeowners insurance through approximately 14,700 exclusive Allstate agencies and financial representatives in the