Americans in their 20s and early 30s are more worried than older adults about saving enough for retirement, paying for their children's education and burdening others with final expenses, according to a new survey from LIMRA and Life Happens, formerly the LIFE Foundation.
The 2014 Insurance Barometer Study found that while other generations are slightly more optimistic than they were in previous years, the millennials are noticeably more anxious about their financial plans.
Among the annual survey's findings:
- Fifty-two percent of consumers ages 25 to 34 said they are very concerned about having enough money for a comfortable retirement, compared to 46 percent of consumers ages 35 to 54.
- About 27 percent of millennials are concerned about paying for a child's schooling, compared to 20 percent of those ages 35 to 44.
- Twenty-six percent of millennials are worried about burdening others with final expenses, compared to 19 percent of consumers ages 35 to 44.
- Of all the age groups, young adults under age 25 are the most worried. Forty-three percent are very concerned about paying for medical expenses, 38 percent are very concerned about leaving dependents in a difficult situation if they were to die prematurely, and 36 percent are very concerned about paying for a child's schooling.
"Having come of age through the recession and facing uncertainty about the future of employer and government protections, millennials are having to take personal financial responsibility to ensure their future plans are secure," Marvin Feldman, president and CEO of Life Happens, said in a press statement. "Life insurance can provide stability and financial peace of mind and yet, while younger Americans recognize its importance, they a lack of basic understanding about it, which may be hindering them from getting the coverage they need."
According to the study, 31 percent of adults overall believe they would feel the financial impact from the loss of a primary wage earner within one month of the loved one's passing. As in previous years, 65 percent of consumers agree that they personally need life insurance and 27 percent believe they need more. One third of those surveyed under age 25 and 29 percent of those ages 25 to 34 say they need more.
The most commonly cited reason survey respondents provide for not purchasing more is cost (63 percent) followed by having "other financial priorities" (59 percent). The survey found this to be particularly true among younger consumers, who are generally more likely to qualify for preferred rates because of their age and good health.
When asked the price for a $250,000 level-term life insurance policy for a healthy 30 year old, the median estimate given by people under the age of 25 is $1,000 -- nearly 10 times the actual cost of $150 a year.
"Overall, more than 80 percent of Americans we surveyed overestimate the cost of life insurance and this misconception hasn't changed much in recent years," Todd Silverhart, corporate vice president of LIMRA Insurance Research, said in a press statement.
LIMRA is a global research and consulting group that tracks the life insurance industry, and Life Happens is a nonprofit supported by life insurance companies.