Page 22 - EQ Mag-2019

WHAT IS THE EQUITY MOVEMENT (EM)

Group Average Credit Score % of Borrowers with  Roughly 83% of savings are in located in retirement  83% of consumers say they don’t purchase more life
of Homebuyer Score 620 accounts like IRAs and workplace-sponsored retirement insurance because it’s too expensive, but consumers
savings plans like 401(k)s. believe life insurance costs nearly 3 times the actual
Asian American 745 2.60%  Millennials, who have just started their savings journey, price.
Black or African American 677 21.30% have currently socked away an average of $24,820. Gen  $400: What most Americans believe a 20-year, $250,000
Hispanic White 701 11.20% Xers have $125,560 in retirement savings. Baby boomers level term life policy for a healthy 30-year-old costs
Non-Hispanic White 734 5.40% and those born before 1946 have an average of annually.
All Others 732 6.30% $274,910.  $150: What it would actually cost.
 29% of households have less than $1,000 in savings.
U.S. Average 728 6.80%
And they don’t understand life insurance, either:
MagnifyMoney used data from the Federal Reserve 70 percent of Americans failed a recent 10-question basic
BY INCOME and the Federal Deposit Insurance Corp. (FDIC) to life insurance IQ test.
estimate the average and median household balances
in various types of banking and retirement savings Sources: LIMRA’s Life Insurance Barometer Study 2013; LIMRA’s
accounts. 2016 household data from the Fed’s Survey Trends in Life Insurance Ownership study; Genworth LifeJacket
of Consumer Finances was adjusted to 2018 levels by Study 2011; LIMRA Household Trends in U.S. Life Insurance
Ownership, 2010; LIMRA’s 2012 report “Closing the Insurance
using June, 2018 market values and fund flows.
Gap: One Household at a Time”
INSURANCE HOMEOWNERSHIP

Most Americans don’t have enough life insurance. Many The Pros and Cons of Owning Your Home "Free and
Americans have no life insurance at all. Why? According to Clear”
BY AGE research, the most common reason given is that they have

competing financial priorities. The second most common Just like every other financial decision, this one is highly
reason? They think they can’t afford it. Looking at the personal and situational. But generally speaking, if owning
shocking numbers behind the coverage gap in America and your home free and clear sounds like a financial strategy that
some of the misconceptions that might be causing it to might fit in with your big picture plans, you’ll first want to
persist. weigh some basic pros and cons.
 Topping the list for most folks in the “Pro” category is
 85 percent of consumers agree that most people need life peace of mind. Plain and simple, you don't have to worry
insurance, yet just 62 percent say they have it. about a mortgage payment, and you know you’ll always
 44 percent of U.S. households had individual life have a roof over your head if, for example, you lose your
insurance as of 2010 — a 50-year low. In 1960, 72 job.
percent of Americans owned individual life insurance. In  For a lot of folks, knowing they’re not paying their hard
1992, 55 percent owned it. earned money to the bank in the form of interest is also a
 40 percent of Americans who have life insurance plus. But freeing yourself from a big mortgage payment
coverage don’t think they have enough. also gives you more financial flexibility to do other things.
 70 percent of U.S. households with children under 18 You can take other chances, for example, like quitting
850 - the higher the score, the better. Due to the high their bank, credit union or online brokerage? would have trouble meeting everyday living expenses your job.
economic diversity within the U.S., the average credit within a few months if a primary wage earner were to die  Included among the cons are tax breaks like the mortgage
score varies greatly among different populations, ages, and  The average American household has $175,510 worth of today. 4 in 10households with children under 18 say they interest deduction you’ll be missing (the higher your tax
income levels. savings in bank accounts and retirement savings accounts would immediately have trouble meeting everyday living bracket, the more tax breaks like this can matter).
as of June 2018. expenses.  Interest rates at historical lows, no one can argue that if
SAVINGS/RETIREMENT  The median American household currently holds about  $15.3 trillion: Estimated unmet life insurance need in the you’ve got the self-discipline, time, and know-how,
$11,700 across these same types of accounts. United States investing that money rather than paying off a low-interest
 The top 1% of households (as measured by income) have home loan can make sense. But let’s be honest, very few
You often read or hear stories about how Americans aren’t
an average of $2,495,930 in these various saving Why aren’t people buying more coverage? folks have that sort of discipline, time and knowhow.
saving enough for college, for retirement, for a rainy day — Unfortunately, many Americans overestimate the cost
for anything, really. But how much do they currently have in accounts. The bottom 20% have an average of $8,720.
of life insurance:
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