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April is recognized as Financial Literacy Month, a time dedicated to promoting awareness about financial education and empowerment. Throughout the month, various organizations and institutions engage in initiatives aimed at enhancing financial knowledge, skills, and decision-making abilities.

Today, the ability to understand and manage finances and insurance is more important than ever. Financial literacy — the knowledge and skills required to make informed financial decisions — plays a critical role in shaping individuals’ financial well-being. Yet, despite its importance, LIMRA research reveals a concerning reality: a significant portion of the population lacks adequate financial literacy, with only a fraction demonstrating a high level of proficiency.

According to LIMRA’s study, which evaluated consumers’ financial literacy by asking 10 questions about essential financial concepts, the average score stood at a mere 4.2 out of 10. This sobering statistic sheds light on the widespread gaps consumers have in managing their money effectively. Alarmingly, more than 1 in 3 consumers performed poorly on the financial literacy quiz, underscoring the urgent need for greater education and awareness in this realm.


Diving deeper into the findings, certain demographic characteristics are associated with higher levels of financial literacy. Men, Baby Boomers, those with higher income levels, married people, parents, those employed or retired, college graduates, and white people were more likely to exhibit higher financial literacy levels. These insights highlight the disparities in financial knowledge across various segments of society and underscore the importance of targeted efforts to bridge these gaps.


The implications of financial literacy extend beyond mere knowledge acquisition. LIMRA’s research reveals a compelling correlation between higher levels of financial literacy and positive financial behaviors (and hopefully outcomes). Individuals with higher financial literacy are more likely to have taken steps to secure their finances. These steps include creating a rainy-day fund, having a monthly budget, saving for retirement, and developing a long-term financial plan. Moreover, they exhibit higher confidence in the financial services industry and report lower levels of financial stress, indicating a greater sense of control and preparedness in navigating financial challenges.

Given the undeniable impact of financial literacy on peoples’ well-being, it is important to prioritize initiatives aimed at expanding financial education and empowerment. To promote financial literacy and help consumers take charge of their financial futures, the industry should consider advocating:

Early and comprehensive education: Integrate financial literacy into school curricula at an early age, ensuring that students develop foundational knowledge and skills to make informed financial decisions as they transition into adulthood.

Accessible resources and tools: Provide readily accessible resources, such as online courses, workshops, and interactive tools, to empower individuals of all ages and backgrounds to enhance their financial literacy at their own pace.

Targeted outreach and support: Implement targeted outreach programs tailored to specific demographic groups — including women, minorities, low-income individuals, and young adults — to address unique barriers and challenges they may face in improving their financial literacy.

Collaborative partnerships: Foster collaboration between government agencies, educational institutions, financial institutions, employers, and community organizations to leverage resources and expertise in promoting financial literacy initiatives.

Continuous learning and engagement:  Encourage lifelong learning and ongoing engagement with financial topics through seminars, webinars, community events, and peer support networks to reinforce and expand individuals’ financial knowledge and skills.

By investing in these strategies and initiatives, we can empower individuals to make informed financial decisions, build resilience against economic uncertainties, and ultimately achieve greater financial security and well-being for themselves and future generations. Together, let us strive to unlock the transformative potential of financial literacy and pave the way toward a more prosperous and equitable society.

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Alison Salka


Alison Salka, Ph.D., is senior vice president, member benefits, at LIMRA, a leading life insurance industry research group.


The opinions expressed by outside experts in’s “Expert Opinion & Commentary” section reflect those of the author and do not necessarily reflect the views of, its parent company QuinStreet Inc. or any of its affiliates and employees. Our editors review these articles and monitor them for accuracy after they've been posted, but the insurance industry sees constant rate changes, regulatory shifts, and other changes. Readers should always check an insurance company's website or contact.