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Title: Money vs Mortality

Author: Newstream

Contributor: Anonymous

Produced for: Allianz Life

Copyrighted: CONTACT: Barb Hemberger
(952)346-6232
bhemberg@webershandwick.com

Money vs Mortality

- 2002 (Newstream)

Study Finds American Baby Boomers and Gen Xers Care More About Their Money Than Their Mortality, But Priorities Are Shifting

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"Report on American Priorities" study finds consumers rethinking values in a time of war, economic downturn

2002 (Newstream) -- Americans are rethinking their priorities in the wake of September 11, according to a new national survey. The majority of Baby Boomers and Gen Xers surveyed say their financial well-being is a higher priority than their mortality, but that number has declined by 10 percent since the tragedy. Meanwhile, those who say they are more concerned about their mortality than their finances increased by 8 percent.

These were among the findings of the "Report on American Priorities," two separate surveys commissioned by Minneapolis-based Allianz (ahl-ee-anz) Life Insurance Company of North America (Allianz Life). One poll questioned 800 consumers aged 25 to 45 in August 2001; the other surveyed the same group of consumers in early January 2002.

While the survey findings show a clear shift in priorities, concern for family members was a consistent motivator for the overwhelming majority of respondents. Most said family concerns were the number-one reason for their priorities, regardless of whether they identified financial well-being or mortality as the more important issue in their lives.

Family Determining American Priorities

Over half (57 percent) of those consumers who said financial well-being was most important to them, cited stress or concern about family security as the number-one reason. For those consumers who said they cared more about their mortality than their finances, nearly three in 10 (29 percent) identified the events, likely including September 11, as the reason.

"These are difficult times, and people are rethinking what really matters to them," said Chuck Kavitsky, senior vice president at Allianz Life. "Americans still care about their finances, but there's less of a concern about personal wealth and more concern about protecting the family."

More Anxiety, Less Preparation

Adding to this uncertainty, there appeared to be a disconnect between how respondents perceived their own level of financial preparedness and how long they could support themselves if they suffered a financial setback, such as serious illness, accident or death.

More than 65 percent said they were "very" or "somewhat" prepared for such an occurrence (virtually unchanged from August 2001). Yet when asked how many months they believed they could continue their current standard of living in the event of a financial setback, 58 percent said they would need financial assistance after less than six months; 38 percent after less than three months; and 13 percent within a month. All of these numbers have increased since August 2001, suggesting that many more Americans do not have an adequate financial safety net.

"Even though the possibility of a major financial setback seems more likely in today's economy, many people are not prepared for it. In fact, the trend is for Americans to see themselves as growing less prepared as time goes by," Kavitsky said. "Some of this anxiety is understandable, even expected, but people shouldn't allow themselves to become paralyzed. It's more important to have a financial plan now than at any time in recent memory."

More than one-third (35 percent) of survey respondents said they are now frequently or occasionally thinking about life insurance. Within this group, 36 percent said they were thinking about it due to family concerns and one in five (20 percent) said it was because of recent personal events or world events, likely including September 11. Sixty-percent of all survey respondents already had life insurance through their employers and 44 percent had purchased it separately.

Among those who had not yet purchased life insurance separate from their employer, 17 percent said they had either considered or inquired about purchasing life insurance since the September 11 attacks. Those who had disability insurance had increased by 5 percent and those who had long-term care insurance increased by 11 percent since the attacks.

Sign of the Times

Looking ahead, Americans are facing other challenges where their personal finances are concerned. Traditionally, life insurance policies have been structured to pay beneficiaries upon death of the policyholder. However, according to Kavitsky, these types of polices no longer fit the needs of Americans who are living longer due to advances in medical technology and extended life expectancy rates.

Seventy-five percent of respondents agree that life insurance policies should offer the ability to access money from their policy for situations other than death. Nearly 47 percent say that they would purchase such a policy. Eighty percent of those who have not purchased additional life insurance beyond an employer-sponsored benefit agree with this statement (August 2001 survey).

Other Key Findings from the August 2001 survey

• One-quarter of respondents (25 percent) say that they are unprepared to deal with a financial setback such as serious illness, accident or death, with 44 percent of these respondents saying they feel unprepared because they "lack financial resources." Furthermore, 21 percent of these respondents say they feel unprepared because they "haven't thought about it."
• Life insurance was the number-one source survey respondents said they would turn to for the majority of their financial support if they or their families had to deal with a financial setback due to death. Nearly half (48 percent) named life insurance, while savings accounts were a distant second at 15 percent. Retirement plans such as 401(k)s came in third at 10 percent.
• An impressive 84 percent said life insurance was either very important or somewhat important to the financial security of their families.
• More than half (53 percent) of respondents say "the inability to work due to serious illness" would have the greatest financial impact on them and their family over the next five years.
• Nearly half (49 percent) said they would lose their life insurance if they left their current employer.
• Nearly half (49 percent) of respondents said they knew someone who has had to ask for financial assistance or raise money to help pay for medical expenses. One in three (33 percent) said they have known someone who has needed assistance for funeral expenses.
• The survey found that 66 percent invest in a 401(k) plan and 52 percent own other stock or bond investments, but less than half have insurance that goes beyond what is offered by their employer.
• The No. 1 reason given by respondents for not purchasing additional life insurance privately was "benefit through employer is sufficient" (38 percent), followed by "waste of money" (18 percent), "single, don't need it" (13 percent); and "too young" (8 percent).
• The survey found that 72 percent of respondents believe they are as financially prepared, or more prepared, than their parents were to deal with a life-altering illness, accident or death.
• Fifty-eight percent of respondents who have purchased additional life insurance privately say they feel more financially prepared than their parents were to deal with a life-altering illness or death, compared to only 39 percent of respondents who have not purchased additional life insurance.

Methodology

Allianz Life commissioned SWR Worldwide to conduct two nationwide surveys of consumers aged 25 to 45. The first survey was fielded among 800 Americans in August 2001. The second survey was fielded among 400 Americans in January 2002. The sampling error associated with this survey is plus or minus five percentage points at the 95 percent confidence level.

In comparing the original survey population (n=800) to that of the post-September 11 survey respondents (n=400), it can be predicted, with 95 percent confidence, that a change of roughly six percentage points or higher is statistically significant.

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About Allianz Life Insurance Company of North America

Allianz Life Insurance Company of North America (Allianz Life) is a leading provider of fixed and variable annuities and life policies, group life and health, and long-term care products through independent distribution networks and financial institutions in the U.S. Allianz Life is also a major provider of life, annuity and health reinsurance services. Allianz Life is part of the Allianz Group, the second largest insurance group and the 25th largest corporation in the world, operating in more than 70 countries. Allianz Life headquarters are based in Minneapolis.

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Produced for Allianz Life
CONTACT: Barb Hemberger
(952)346-6232
bhemberg@webershandwick.com
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