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Birds, bees and life insurance

By Jay MacDonald ·
Tuesday, September 3, 2013
Posted: 9 am ET

Ask any life insurance agent to name the major obstacles to selling policies, and the answer will invariably include the big D, otherwise known as the Grim Reaper or the long dirt nap. If there's one thing we humans universally hate to contemplate, it's death -- and doubly so our own mortality.

But just how uncomfortable are most of us when it comes to using a relatively simple financial tool like life insurance to divvy up our dough once we've left the building?

The short answer, from a new State Farm survey, is: pretty darn uncomfortable.

A touchy topic

The insurance giant, together with Harris Interactive, polled a nationally representative sample of 2,019 good neighbors age 18 and over, of whom 1,056 were parents.

When asked to rate their comfort level when talking with their children about various important topics, life insurance (38 percent) and family finances (36 percent) rated near the bottom third, just ahead of the perennial squirm-inducing facts-of-life chat (30 percent). By contrast, more than half preferred a heart-to-heart about drugs and alcohol (55 percent) or religion (53 percent). Politics, at 44 percent, was a more agreeable topic than money, sex and life insurance.

Why the cold sweats over post-life planning? If we set aside the whole dirt-nap aversion factor, the survey suggests that denial and confusion may contribute to the negative vibes around life insurance.

Mistaken impressions

While nearly 8 in 10 (78 percent) of the survey group consider themselves somewhat knowledgeable about life insurance, nearly half (44 percent) were under the mistaken impression that benefits only flow once the insured is pushing up daisies.

"While the primary benefit of a life insurance policy is a death benefit -- or the payment made upon the passing of the insured individual -- some policies, such as permanent policies, also offer living benefits," says Joe Monk, senior vice president and chief administrative officer of State Farm Life. "These policies build a cash value that can be used over time for other life goals, such as paying for college or providing a little extra cushion during retirement."

That disconnect may explain why the parents surveyed would be more inclined to adjust their budget to afford cable TV (76 percent), a family vacation (69 percent) or cellphones and service for the whole family (62 percent) than for life insurance (59 percent).

Putting the 'life' back in life insurance

How can life insurers break through the doom-and-gloom barrier? State Farm hopes it can put the "life" back in life insurance with its new Family Bucket List social media campaign.

The goal of the Family Bucket List is to savor the fun in life by posting and sharing your family goals and accomplishments, a la Facebook. The underlying message, of course, is that it takes a little financial planning to realize your dream of, say, trekking to Seattle to contribute a piece of chewed Dubble Bubble to the Market Theater Gum Wall, after which I'd suggest you wash your hands. You can check out more bucket-worthy ideas to chew on at

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Jay MacDonald is a Bankrate contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.

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