Most life insurance policyholders have spoken to their beneficiaries about their policy, but are lax in updating policy information, according to a new survey.
A total of 84% of policyholders said they have spoken about the policies in place, while 54% of respondents said they talked about face value, 47% said they spoke of who the beneficiaries are and 20% explained who the life insurance agent is, according to the Nationwide Financial Services survey, released in conjunction with Life Insurance Awareness Month.
About 91% of policy owners say their beneficiaries are aware of being designated on the policy, according to the poll of 805 life insurance policyholders was conducted by Harris Interactive.
About 20% of policy owners have not provided their insurer with up-to-date contact information for their beneficiaries. More than half (55%) of policy owners did not change their beneficiary after divorce. And most policy owners (57%) who have talked with their beneficiaries about the policy have not told beneficiaries where the policy is located.
The majority of life insurance policy owners (70%) say they are confident their beneficiaries would know how to file a claim, and most have taken proactive steps to help them prepare.
Life insurance can provide families with stability and financial security during a very difficult time in their lives, said Peter Golato, senior vice president of Individual Protection for Nationwide Financial, in a statement. Its encouraging that so many policy holders have taken steps to ensure that their loved ones will be able to quickly and easily access their benefits in the unfortunate event that they need to file a claim.
The top five reasons that policyholders purchased life insurance were no particular reason (30%), started a new job (29%), got married (16%), had a baby (12%) and bought a house (10%).
The major catalysts for a change of beneficiary were getting married (30%), having a baby (21%), getting divorced (19%) and the death of a beneficiary (18%), the survey found.
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