American Families Overconfident and Underprepared for an Unexpected Death, According to New USAA Data

SAN ANTONIO – (September 1, 2021) End-of-life planning is not a popular conversation topic -- so much so that Americans feel more comfortable talking about politics (68%) than about planning for an unexpected death (62%). In a new survey, USAA Life Insurance Company explored how American civilian and military families talk about and prioritize life insurance and end-of-life planning. The survey uncovered a preparedness gap for many Americans, as new financial attitudes and tools have emerged.

This gap is most evident when looking at financial resiliency over time. The majority of respondents (74% of civilians and 84% of military family participants) believe their family would be financially secure in the event of their death. However, when asked how long their family would be able to afford basic living expenses (i.e., mortgage/rent, childcare, etc.) if the primary financial provider died, 40% of civilian families and 27% of military families say they couldn’t survive financially for more than one year.

“USAA recommends having enough life insurance to pay off all of your debt and replace income for at least five years,” said Brandon Carter, president of USAA Life Insurance Company. “Life can’t wait. It’s important to protect your family today, so that if the unexpected happens, their primary focus can be supporting one another.”

Nearly half of Americans (47%) believe money is the most important thing to leave your family when you pass, and life insurance is seen as the most important instrument when passing wealth down in the family (31%). Unfortunately, less than half (46%) of Americans have life insurance.

The survey also identified several barriers and disparities to life insurance and financial end-of-life planning. Specific data points include:

• Cost Matters: An unclear or perceived high monthly cost is a contributing factor to why most Americans do not have life insurance. Civilians shy away from it because they believe it costs too much (30%), while 29% of military family respondents feel they have sufficient resources and don’t need it.

• Gender Disparities: Female respondents across both audiences (civilian and military families) are more likely to have less life insurance than their partner (38%) when compared with males (11%). Females (65%) are also at a greater risk of financial instability (reporting being able to keep up with basic living expense payments for only five years or less) in the event of an unexpected death than their male counterparts (51%)

• Racial Inequity: Hispanics and Blacks are at a greater risk (71% and 76%) than whites (52%) of financial instability in the event of an unexpected death.

For those unsure of life insurance, USAA shares why everyone should be covered, no matter how prepared you may think you are:

• Lock In Your Good Health: Your life and your health can change unexpectedly. Purchasing a policy when you’re younger and healthier likely means you’ll pay less, and you’ll also be protected if your situation changes.

• Take Control: While you may have life insurance coverage through your job, it may not be enough. And, if you switch jobs or leave the workforce to care for family, you may lose that coverage. A policy separate from your employer ensures you’re covered through any job transitions.

• Review for Confidence: One size and policy does not fit all. Your life insurance needs may change over time – whether you got married, expanded your family, or bought a house, it’s important to review your coverage annually and adjust as needed. Some policies allow you to buy additional coverage without a medical exam. You can also purchase additional policies to meet your coverage needs.

Learn more about USAA’s life insurance options at usaa.com/lifecantwait.

About USAA’s Life Insurance Survey
This research was conducted by KRC Research from July 28 to August 11, 2021, via an online survey of 2,008 Americans ages 18-75 representing both the military family and civilian populations. The sample breakdown is as follows: n=1,007 civilians and n=1,001 military.

About USAA
Founded in 1922 by a group of military officers, USAA is among the leading providers of insurance, banking and investment and retirement solutions to nearly 13 million members of the U.S. military, veterans who have honorably served and their families. Headquartered in San Antonio, Tex., USAA has offices in seven U.S. cities and three overseas locations and employs more than 35,000 people worldwide. Each year, the company contributes to national and local nonprofits in support of military families and communities where employees live and work. For more information about USAA, follow us on Facebook or Twitter (@USAA), or visit usaa.com.

Life insurance and annuities provided by USAA Life Insurance Company, San Antonio, TX and in New York by USAA Life Insurance Company of New York, Highland Falls, NY. All insurance products are subject to state availability, issue limitations and contractual terms and conditions. Each company has sole financial responsibility for its own products.

Additional Findings from the 2021 USAA ‘Life Can’t Wait’ Survey

Americans are Optimistic about their Financial Preparedness, but Often Underprepared

• The majority of respondents (74% of civilians and 84% of military family participants) believe their family would be financially secure in the event of their death. However, when asked how long their family would be able to afford basic living expenses (i.e., mortgage/rent, childcare, etc.) if the primary financial provider died, 40% of civilians and 27% of military respondents say their families couldn’t survive financially for more than one year.
• 37% of civilians estimate they have $30K or more in debt.
• Over half of uninsured Americans report no increased interest in life insurance due to the COVID-19 pandemic (53%). Uninsured active-duty military families, however, showed the most interest, with over nine in 10 (91%) becoming more interested in obtaining life insurance due to the pandemic.
• Nearly half of Americans (47%) believe money is the most important thing to leave your family when you pass, and life insurance is seen as the most important instrument when passing wealth down in the family (31%). Unfortunately, less than half (46%) of Americans have life insurance.

Life Insurance is a Misunderstood and Often Hard to Talk about Topic

• An unclear or perceived high monthly cost is a contributing factor to why most Americans do not have life insurance. Civilians shy away from life insurance because they believe it costs too much (30%), while 29% of military family respondents feel they have sufficient resources and don’t need it.
• More Americans feel comfortable talking about health problems (74%), politics (68%), religion (73%) or sexuality (63%) than talking about planning for an unexpected death (62%).
• 28% of Americans believe life insurance costs more than $100 per month.

Lack of Life Insurance Further Illustrates Inequity

• Female respondents across both audiences (civilian and military family) are more likely to have less life insurance than their partner (38%) when compared with males (11%).
• Hispanics and Blacks are at a greater risk (71% and 76%) than whites (52%) of financial instability (reporting being able to keep up with basic living expense payments for only five years or less) in the event of an unexpected death.
• Financial instability is also correlated with income, where those making less than $50K/year are at greater risk (72%) than those making $50K-100K (51%) or more than $100K (50%).

Priorities Shift to Incorporate New Financial Products and Services

• Just over a quarter of civilians (28%) and about a quarter of military family respondents (26%) have purchased crypto currency as a part of their retirement or financial planning. Adoption of cryptocurrency is even greater within the active military family audience, with 61% report having purchased it.
• 10% of Americans have purchased an NFT as part of their financial planning consideration set.
• Three in four active-duty military family respondents (74%) have planned their ideal funeral, compared to just 40% of civilians and 43% of veterans.
• 41% of Americans have contributed to a crowd-funded funeral