A new survey from Allianz Life Insurance Company of North America has found that nearly nine in 10 people (88 percent) understand the death benefit component of permanent life insurance, yet more than half (51 percent) are unsure or do not believe cash value from permanent life insurance can be used to help fund college education, supplement retirement income, or assist with other financial needs.
Furthermore, a full two-thirds (66 percent) are unsure or do not believe benefits paid from life insurance are not taxable.
When asked what they find most valuable in financial products, 85 percent of respondents said one that "provides a source of tax-free income in retirement," followed by 78 percent who value one that "provides tax-free money for family/loved ones," and 68 percent who want a product that "provides the ability to use the funds to pay for college."
"There is a tremendous opportunity for financial professionals to bridge this education gap about permanent life insurance, particularly for financial professionals who are just beginning to embrace a holistic planning model that addresses all aspects of their client's financial life," said Jason Wellmann, senior vice president of life insurance sales for Allianz Life. "Too many Americans with significant retirement assets are not optimizing their financial strategy because they simply don't know all of their options."
The survey, which questioned Americans between the ages of 35-60 with an annual household income of $100,000 or more, also found that three-quarters of people who work with a financial professional are discussing sources of tax-free retirement income with their professional. Additionally, a full 70 percent discuss ways to fund their child's college education and more than half (52 percent) talk about financial products that offer low/no interest loans against its cash value.
"Nearly 95 percent of respondents in our survey said the ability to save enough to retire comfortably was a top priority when planning for their financial future. Americans need a diverse mix of financial products to help them achieve that goal," added Mr. Wellmann. "It's imperative that all financial professionals have access to a variety of innovative options that can help their clients add both protection and opportunity to their long-term financial strategy."