New Research Underscores Value of Life Insurance in Helping Consumers Address Today’s Top Financial Planning Challenges

Amid rising concerns around inflation, market volatility and tax and business planning, Lincoln Financial Group is using Life Insurance Awareness Month to encourage people to consider the living benefits of life insurance

New research from Lincoln Financial Group (NYSE: LNC) finds U.S. consumers surveyed are looking to better understand how to weather the current economic climate, yet few are taking action. During Life Insurance Awareness Month, Lincoln Financial encourages consumers to adopt an “if not now, when?” financial planning mindset, highlighting how the often unknown or misunderstood living benefits of life insurance, which can be accessed during a policyowner’s lifetime, can help address the challenges of today, including inflation, market volatility and potential tax changes.

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“Nearly 70% of life insurance owners surveyed say they feel financially secure compared to 47% of non-owners, yet just half of American adults have any type of life insurance coverage¹,” said Matt Grove, executive vice president and head of Individual Life & Annuities and Lincoln Financial Network. “Life insurance can help provide families financial security, as it’s done during the pandemic, and offers the flexibility to address some of the economic challenges we face today, like volatility and inflation. While people often know about the importance of life insurance death benefits, the ‘living benefits’ are often overlooked. Times like these should be a call to action to speak with a financial professional, evaluate your plan and your options and prepare for the future today.”

Protecting against inflation and market volatility

Inflation is the top personal financial concern of consumers surveyed, with two-thirds saying they feel concerned, and 61% saying they’re more concerned as a result of the current environment². Stock market volatility also has the attention of respondents, with 43% saying it is a concern, and 37% saying they’re more concerned as a result of the current market². Relatedly, Lincoln Financial’s research finds that having enough income in retirement is the second-most cited concern of those surveyed, with having enough money to cover large purchases/expenses and outliving money also high on the list².

Despite more than 80% of consumers surveyed wanting to better understand how they can protect against inflation and market volatility, only about 1 in 5 have reviewed or made changes to investments or financial plans to address either². Life insurance can help address the impacts of inflation and volatility, with certain policies offering:

• Access to any cash value in the policy for needs such as funding a child’s college tuition or supplementing retirement income
• Investment accounts, including indexed accounts to pursue market upside with downside protection
• Optional features to help protect against cost-of-living increases by automatically growing the policy’s coverage each year

Preparing for taxes in retirement

The potential for tax changes is also top of mind for many, particularly related to retirement plans. More than half of consumers surveyed by Lincoln Financial are concerned about how tax changes may impact their ability to live off retirement savings, retirement income and lifestyle. Similarly, 46% are concerned how tax changes may impact estate plans and beneficiaries. Despite 43% of respondents stating they are not prepared for estate taxes, and 32% reporting they are not prepared for income taxes in retirement, less than 30% have ever spoken to a financial professional about ways to minimize exposure to taxes in their investment or retirement accounts³.

Taxes are another financial planning challenge that life insurance can help with, including:

• Tax-deferred cash value growth opportunities
• Income tax-free death benefits passed on to beneficiaries
• Tax-advantaged charitable giving options
• Effectively and efficiently transferring an estate from one generation to the next

Strengthening your business

In today’s competitive hiring market, life insurance can play an important role in attracting, retaining and rewarding employees and making sure that a business continues into the future. In fact, 77% of employees surveyed see insurance benefits other than health insurance as a must have or very important when deciding to take a new job, according to research from Lincoln Financial⁴.

Small businesses are no exception, with more than a quarter (28%) of small business owners surveyed offering better benefits to attract and retain talent as a result of the pandemic — and life insurance is the top benefit added⁵. However, just 22% of small business owner respondents have spoken with their financial professional about protecting against the loss of key people, only 37% offer life insurance as part of executive incentive packages, and just 43% have a formal transition plan that includes a financial strategy, which life insurance can help address⁵.

“In the current hiring market, business owners are recognizing the value a comprehensive benefits package has in attracting and retaining top talent,” said James Reid, executive vice president, head of Workplace Solutions. “And life insurance is more important than ever, as employers look to offer options that give peace of mind to their employees by ensuring they can protect their loved ones.”

To help consumers understand the many different ways life insurance can help plan for the future as part of a well-rounded financial plan, Lincoln offers the following online resources:

• Understanding the basics
• Beyond protection
• Living benefits
• Business planning

About Lincoln Financial Group

Lincoln Financial Group provides advice and solutions that help people take charge of their financial lives with confidence and optimism. Today, approximately 16 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, and guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $279 billion in end-of-period account values as of June 30, 2022. Lincoln Financial Group is a committed corporate citizen included on major sustainability indices including the Dow Jones Sustainability Index North America and FTSE4Good and ranks among Newsweek’s Most Responsible Companies. Dedicated to diversity, equity and inclusion, we are included on transparency benchmarking tools such as the Corporate Equality Index, the Disability Equality Index and the Bloomberg Gender-Equality Index. Committed to providing our employees with flexible work arrangements, we were named to FlexJobs’ list of the Top 100 Companies to Watch for Remote Jobs in 2022. With a long and rich legacy of acting ethically, telling the truth and speaking up for what is right, Lincoln was recognized as one of Ethisphere’s 2022 World’s Most Ethical Companies^®. Learn more at: www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn, and Instagram. Sign up for email alerts at http://newsroom.lfg.com.

Sources:

1. LIMRA, 2022 Insurance Barometer Study, April 2022
2. Lincoln Financial Group, Consumer Sentiment Tracker, 1Q-2Q 2022
3. Lincoln Financial Group, Monthly Consumer Sentiment Tracker, December 2021
4. Lincoln Financial Group, Monthly Consumer Sentiment Tracker, November 2021
5. Lincoln Financial Group, Small Business Owner Survey, November 2021

LCN:4931838-090122

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