COVID-19 Is Prompting Families to Rethink Their Finances

COVID-19 Is Prompting Families to Rethink Their Finances

COVID-19 has led families to cancel travel
plans, get (semi!) comfortable with homeschooling kids and deal with all kinds
of other inconveniences.

As if that weren’t enough, it’s also making
many families take a closer look at their finances and make sometimes difficult
financial decisions.

Life Happens recently conducted a survey that
polled more than 2,000 adult Americans about how the pandemic changed their
financial views and behaviors. Our “Tough Talks During
COVID-19
” survey results showed that dramatic changes are taking place.

For starters, more than two-thirds (67%) of
respondents said that COVID-19 has served as a wake-up call to reevaluate their
finances. Many of these respondents feel more comfortable talking about
financial matters around the dinner table⁠—today,
only 40% feel uncomfortable having these discussions
versus 45% in January 2020 before the pandemic hit.

What
Families Are Talking About

Here’s what our respondents said comes up when
they have these conversions:

  • Wills and inheritance (33%)
  • Current health issues and concerns
    (32%)
  • Life insurance coverage (30%)
  • Current financial status (29%)
  • Emergency savings (27%)
  • Future emergency plans (26%)
  • Politics (25%)

Families Also Changing Financial Habits

Besides having these
discussions, families have also changed their financial behavior since COVID-19
surfaced. The changes include:

  • Cutting excess spending
    (49%)
  • Building up savings and
    emergency funds (45%)
  • Continue working and delay
    their planned retirement date (43%)
  • Dipping into retirement
    funds (37%)
  • Focusing on paying down
    debts (24%)

Getting
Comfortable with the Uncomfortable

While families are talking more about the
state of their finances, they admit that these conversions aren’t easy. Nearly
seven in 10 (69%) said they want to be even more open with their partners about
their finances. They also want to spare their kids, with 60% saying they avoid
discussing money with children because they don’t their want kids to worry.

Today, these conversations are more important
than ever: Respondents said that they don’t believe they’ll be truly
comfortable with their financial status for another 8.5 months.

Now’s
the Time to Consider Life Insurance

But there are some silver linings. Americans
aren’t known for being savers, but the pandemic has made people sock away money
by cutting out needless purchases.

What’s more, 66%of respondents believe that
COVID-19 helped them better understand life insurance. Meanwhile, a quarter
(25%) of respondents have bought life insurance for the first time because of
it.

COVID-19 made many of us seriously consider
our mortality for the first time. It’s sadly shown us that no one—not even the young and healthy—are assured a long life. And that an untimely
passing all too often leaves the ones left behind on shaky financial ground.

That’s where life insurance can be a financial
lifeline. It provides funds that let your family maintain their standard of
living when your earnings are no longer in the picture.

Life insurance is probably a lot less
expensive than you think. Many people are surprised to learn that a healthy
30-year-old can get a $250,000 20-year level term policy for just $13 a month.
With this policy, your loved ones would receive $250,000 if you were to pass
away between the ages of 30 and 50. (And they’d receive the full $250,000,
since life insurance proceeds almost always pass on tax free.) To get an idea
of how much life insurance you’d need, check out our Life Insurance Needs Calculator.

It’s important to remember that any amount of
life insurance is better than none at all⁠—and that talking to an insurance advisor is always free. Today, many
insurance advisors can help you explore your options and secure coverage via
phone, email and/or video chat. Start the process by using our Agent Locator.

These conversations may not be easy. But the
peace of mind you’ll get knowing that your loved ones are protected makes them
completely worth it.

Provided by: Life Happens

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