MDRT Annual Meeting 2017

US Consumers Under-Prepared, Under-Protected

A new study released at the 2017 MDRT Annual Meeting has revealed American families reflect similar charateristics to those belonging to many Australian families when it comes to being prepared against future potential risks.

MDRT 2017-Study-The-Risk-Takers-of-Financial-PlanningThe study of more than 2,000 American adults, commissioned by MDRT, found that about half (47 percent) said if they were to lose their primary source of income tomorrow, they could only maintain their current lifestyle for three months or less.

The study also found that many Americans, even those considered financially successful, do not account for unexpected risks during financial planning.

Key findings included:

  1. A majority of Americans (61 percent) say their family would assume debt if they passed away tomorrow, with 38 percent of U.S. adults saying the debt would be $10,000 or more
  2. Only half of Americans (50 percent) have life insurance
  3. Of those who have any dependents, 47 percent say their dependents would run out of money without their personal income in two years or less if they were to pass away tomorrow

MDRT President, Mark Hanna, said, “While these families with a steady source of income may seem prepared, they are jeopardizing it all by not having the right protection to ensure future financial security for themselves and their families.”

A statement accompanying the release of the study, noted, ‘Americans are also not taking in to account the possibility of disability or illness while planning for their financial future.’ It continued, ‘One in 20 Americans (five percent) are unemployed and unable to work because of disability or illness, but only 20 percent of U.S. adults have either short-term and/or long-term disability insurance. Of those Americans who do have disability insurance, only 39 percent believe it would be enough to cover their long-term care and medical expenses if they were to have an accident.’

…families considered financially successful are also at risk

“It’s not just lower income Americans who are vulnerable to financial strain in the event of a life-altering incident; families considered financially successful are also at risk,” said Hanna. “A financial professional can help identify potential risks and work with you to set up a plan that protects your family from these pitfalls,” he added.

Accompanying the release of the study is an infographic that summarises a number of the key findings taken from the study. Click here to access The Risk Takers of Financial Planning infographic.

Advisers can also view MDRT’s full study results to learn about planning around financial risks.