The Hartford Survey Finds Workers With Lower Incomes Lag Behind In Life Insurance Knowledge, Participation

Published on Wednesday, 01 September 2010 08:38 Written by TradersHuddle Staff

SIMSBURY, Conn.-( Business Wire )-

America’s lower income and less educated workers lag behind in the understanding and purchasing of life insurance than employees with higher household income and education, according to a recent national survey¹ by The Hartford Financial Services Group, Inc. (NYSE: HIG).

The Hartford’s national survey of full-time workers showed employees with a high school education had the lowest level of understanding of life insurance and were least likely to sign up for this benefit (65 percent) compared to workers with a college degree. Thirty percent of workers with only a high school education said they completely understand life insurance.

Survey respondents with a household income of less than $50,000 were least likely to completely understand life insurance (29 percent) and were least likely to sign up for this benefit (64 percent). The average earnings for a full-time U.S. worker is nearly $38,500,² which translates to a considerable segment of the employee population that would fall into this category, noted Ron Gendreau, executive vice president, The Hartford’s Group Benefits.

“We are concerned that many working Americans are putting their family’s financial security at risk. No matter what your income level, you can benefit from life insurance,” Gendreau said. “We’re encouraging all employees to get up-to-speed on the protection this month – Life Insurance Awareness Month.”

The overall number of workers signing up for life insurance benefits increased from 64 percent in 2009 to 69 percent in 2010. Women showed the biggest jump in participation, going from 60 percent last year to 69 percent this year. Men increased their participation by two percentage points to 70 percent in 2010.

The Hartford’s survey found Generation Y (ages 18-29) had the lowest level of life insurance understanding and participation compared to Generation X (ages 30-44) and Baby Boomers (ages 45-65). Sixty-four percent of Gen Y said they completely or mostly understand life insurance compared with 77 percent Gen X and 79 percent of Boomers. Gen Y had a 64 percent participation rate compared to 70 percent for Gen X and 71 percent for Boomers.

“We are encouraged that the survey found more workers across all generations have signed up for this benefit. Our survey shows there’s an opportunity to communicate the value of life insurance to younger workers,” he said. “If you are young and single, you don’t need as much coverage as those who are married with children, but life insurance may provide help for a loved one, such as a parent, or can cover personal debt, such as student loans. Plus, group life insurance is a less expensive option that is easily paid for via payroll deductions.”

Gendreau noted The Hartford’s group life insurance features services that can help workers immediately, including travel assistance and will preparation. The travel service offers information to help travelers before they set off on a journey and provides emergency medical assistance during travels. The will service helps workers create a simple legal will online.

The Hartford recently enhanced its group life coverage by offering expedited payment of death benefits. In this new payment process, beneficiaries who use funeral planning services provided by Everest Funeral Planning³ may receive death benefits in as little as 48 hours from the date of death. The death benefit may be expedited in instances where the insured died from natural causes and the cause of death is not being investigated.

Employees Picking Up The Tab

More employers are asking their employees to pick up more of the cost of life insurance compared to last year, according to The Hartford’s survey. The number of workers who said their employer pays 100 percent of life insurance dropped from 37 percent last year to 33 percent in 2010. The percentage of employers who pay for some of the insurance costs dropped by 3 points in 2010.

“As benefits costs are being shifted, we hope employers will help their employees understand the financial choices they are making during benefits enrollment. Employees are less likely to enroll in the benefits that they don’t understand,” said Gendreau. “Life Insurance Awareness Month is a great opportunity for companies to provide education about this financial security tool.”

About The Hartford

Celebrating 200 years of helping its customers achieve what’s ahead, The Hartford (NYSE: HIG) is an insurance and wealth management company. Through its unique focus on customer needs, the company serves businesses and consumers by providing the products and solutions they need to protect their assets and income from risks and manage their wealth and retirement needs. A Fortune 100 company, The Hartford is recognized widely for its service expertise and as one of the world's most ethical companies. More information on the company and its financial performance is available at www.thehartford.com.

HIG-CM

Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2009 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.

1. An independent market research agency conducted an online survey on behalf of The Hartford, polling more than 1,000 U.S. adults, aged 18-64, in March 2010.
2. U.S. Bureau of Labor Statistics
3. Funeral Concierge Services are offered through Everest Funeral Package, LLC (Everest). Everest is not affiliated with The Hartford and is not a provider of insurance services. Everest and its affiliates have no affiliation with Everest Re Group, Ltd., Everest Reinsurance Company or any of their affiliates.

The HartfordKelly J. Carter, This e-mail address is being protected from spambots. You need JavaScript enabled to view it.