Inaugural Allstate Life Tracks Poll Shows Opportunity for Financial Services Education and Action

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Sep 18, 2012, 11:00 ET

NORTHBROOK, Ill., Sept. 18, 2012 /PRNewswire/ -- While 82% of Americans surveyed say they've done at least "some" planning for their long-term finances, more than a quarter (27%) do not have a savings account and about four in 10 respondents report not having retirement savings (43%) or life insurance (37%), according to the inaugural Allstate Life Tracks Poll.

"Everyone's financial needs are different, and each individual and family has to make the financial choices that are right for them. Through the Allstate Life Tracks Poll, we want to help people in every 'life track' move further along the path to financial well-being," said Don Civgin, president and chief executive officer of Allstate Financial, which sponsored the poll. "These results are a call to action for the financial services industry. We should do more to reach out to consumers, both to help them better understand some of the fundamental building blocks for financial fitness and identify additional ways to improve their financial well-being."

While a substantial portion of those polled say they have prepared for their financial futures, Americans are only lukewarm about their ability to achieve certain financial goals and milestones. In addition, the Allstate Life Tracks Poll showed major differences in attitudes and behaviors based on a respondent's "life track," or the major life events that individuals face at varying ages. (See www.myallstatefinancial.com/life-tracks.) For example:

On my own/marriage and partnerships: By wide margins, single (never married) Americans surveyed are much less likely than those who are married to have basic financial products, including life insurance (42% versus 73%), retirement savings (32% versus 69%) and stocks/mutual funds (28% versus 50%).
Job loss or change: A total of 39% of respondents indicate they are extremely or very realistically prepared financially in the event they or their spouse/partner loses a job. The percentage remains the same (39%) for parents with children under age 18, but declines to 35% when single Americans are polled.
Change in health: A total of 43% say they are extremely or very realistically prepared financially in the event of a serious injury or illness to themselves or a spouse/partner.
My family's future: While 39% say that leaving money for their children or grandchildren to inherit is extremely or very realistic, half of parents in two-income households say it's not realistic that they'll be able to leave money for their children or grandchildren.
Planning your retirement: A total of 41% say that it is extremely or very realistic that they will be able to maintain their current standard of living after retirement.
Dealing with debt: A total of 46% say it's extremely or very realistic that they will be able to get out of debt. A higher level of education leads to greater confidence – 54% of people with college degrees versus 39% respondents with high school education say it's extremely/very realistic that they will become debt-free.

Responses also varied by income, education, and race or ethnicity. Wealthier people and college graduates expressed greater confidence in their financial futures and owned more products. With the exception of college savings accounts, African-Americans and Hispanics are less likely than white Americans to report having personal savings accounts, retirement savings accounts, investments, life insurance or annuities.

While nearly all respondents (90%) are confident they have the right information to make well-informed financial decisions, sizable numbers admit they have trouble trying to understand how different products can help their future financial planning. A total of 46% of Americans polled say they have trouble understanding annuities, 27% expressed the same lack of understanding about stocks and mutual funds, 17% about college savings, 16% about retirement savings accounts, and 9% about life insurance.

"The Allstate Life Tracks Poll encourages consumers to take a closer look at their financial preparedness and take action," Civgin said.

Key findings from the inaugural Allstate Life Tracks Poll (PDF) include:

1. Half of Americans find themselves in a precarious financial situation and as a result, they are concerned about their long-term finances. Just under half (49%) of Americans surveyed report that their personal financial situation is "excellent" or "good," while the other half (50%) say it is "fair" or "poor." More than half of white Americans say that their personal financial situation is excellent or good (55%), while African-Americans (22%) and Hispanics (36%) are considerably less likely to say the same thing. Americans with college educations are more likely to be doing well financially (65% excellent/good) than Americans without a college degree (37% excellent/good).

2. Despite the fact that half cite "poor" or "fair" current financial situations, Americans still overwhelmingly say they are extremely, very or somewhat "confident" (83%) or "hopeful" (86%) about their future finances, and they are much less likely to say they are extremely, very, or somewhat "nervous" (46%), "confused" (34%) or "depressed" (22%). Not surprisingly, income is the primary driver of these emotions.

3. 82% of Americans say they have planned a great deal or "some" for their future financial needs, and 90% are confident they have the right information to make well-informed financial decisions. Nearly four in five (78%) of Americans surveyed indicate that their plans are on the right track, while 16% say their plans are on the wrong track.

Almost all respondents (90%) discuss their financial products and plans with either a professional planner or family and friends – 64% with planners and 50% with family and friends. Their planning and research does not always lead to a comfort level with various product categories, illustrated by the percentages of those who claim to be extremely or very knowledgeable about annuities (26%), stocks and mutual funds (39%), college savings (53%), retirement savings vehicles (55%) and life insurance (65%).
Nearly three-fourths (73%) of Americans surveyed have a personal savings account, 63% have life insurance, 57% have retirement savings such as an IRA or 401(k), 42% own stocks and/or mutual funds; 42% have an employer-funded pension plan, 21% have college savings for children or grandchildren, and 20% have an annuity.
With an extra $100 or $200 a month to spend on their long-term finances, 24% would pay off debt; 21% would put it into savings, 18% would put it into retirement savings, 13% would devote it to college savings, 11% would invest in the stock market, 3% would buy life insurance and 2% would buy an annuity.

4. Most Americans surveyed view life insurance as a necessary product (66%) and responsible (70%) financial decision. A total of 63% have life insurance. On average, these Americans purchased life insurance at age 27 and more than three-quarters (76%) purchased their first policy before age 35. Respondents are more likely to have coverage if their parents also had life insurance. A total of 63% of Americans say their parents have (or had) life insurance, while 25% say they do not (or did not). Among the 63% of Americans whose parents had life insurance, 70% currently have life insurance. Among the 25% whose parents did not have it, a smaller 53% currently have life insurance.

Americans without life insurance say they don't need it (34%) or believe it is too expensive (27%). Overall, 19% say it's not worth the money, 17% find it confusing, 13% consider it depressing to plan for death, and 44% believe that "a good value" describes life insurance extremely or very well.
On the other hand, 72% disagree with the statement that "life insurance is not worth it if you're not married and you don't have kids;" 88% reject that "only primary income earners need to have life insurance;" 86% reject that "life insurance is only a good value for young and healthy people;" and 66% disagree with "if I have enough money saved and invested, then I don't need life insurance."

Note to Editors on Survey Methodology
A nationally representative survey of 1,000 American adults age 18+ who have thought about or planned for their future financial needs. The survey was conducted August 4-8, 2012 via landline and cell phone. The survey has a margin of error of +/-3.1% in 95 out of 100 cases. The survey was conducted by FTI Consulting, Inc.

The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held personal lines insurer, serving approximately 16 million households through its Allstate, Encompass, Esurance and Answer Financial brand names and Allstate Financial business segment. Allstate branded insurance products (auto, home, life and retirement) and services are offered through Allstate agencies, independent agencies, and Allstate exclusive financial representatives, as well as via www.allstate.com and 1-800 Allstate^®, and are widely known through the slogan "You're In Good Hands With Allstate^®." As part of Allstate's commitment to strengthen local communities, The Allstate Foundation, Allstate employees, agency owners and the corporation provided $28 million in 2011 to thousands of nonprofit organizations and important causes across the United States.

The Allstate Life Tracks Poll was inaugurated in August 2012 to spur dialogue and call attention to the need for financial well-being and preparedness. For more information, visit www.allstatenewsroom.com.

Note: Infographics illustrating key points of the poll can be found at http://allstatenewsroom.com/channels/News-Releases/releases/inaugural-allstate-life-tracks-poll-shows-opportunity-for-financial-services-education-and-action

SOURCE Allstate Insurance Company