Number One Stress Inducer: Saving Enough for College, Per Financial Advisors
Advisors Say Tuition Insurance is Smart Option to Protect Investment
Saving for college can create high anxiety. In a new survey of financial advisors released by Allianz Global Assistance, nothing prompts greater stress for clients with children under the age of 18 than saving enough for college tuition. Nearly nine in ten (87 percent) financial advisors say the leading cause of investment anxiety is college savings, followed by retirement planning (76 percent). Nearly six in ten (58 percent) say clients are concerned about not earning enough to cover the costs associated with earning a college degree.
Tuition insurance is one approach to ease anxiety with the majority of financial advisors (more than six in ten) saying they would recommend it to their clients. Support among financial advisors increases to nearly eight in ten if students are taking out loans to help cover college costs and more than seven in ten for first-year college students.
“Attending college is an investment of time and money. Increasingly, parents and students are choosing to protect their college savings with tuition insurance, just as they protect other large investments, such as their homes and cars,” said Joe Mason, Chief Marketing Officer of Allianz Global Assistance USA.
|Percentage of financial advisors with clients who have children under 18 who report those clients are stressed about investing
(Numbers below = %; Some percentages may not add up to 100% due to rounding)
|Type of investment||Total stressed||Extremely or very stressed||Somewhat stressed|
A June 2016 consumer report states that two-thirds of students will take out loans to assist in covering college expenses and that surprisingly few of these students are educated on financial aid and investment prior to accepting that commitment. Students and their families are often facing increased college tuition and associated fees, funding their education through loans and sometimes taking longer than the traditional four years to complete a degree.
“Tuition insurance protects students from the possible loss of thousands of dollars should they need to leave school for a reason covered by the policy,” Mason said. “Safeguarding your tuition investment is a smart financial decision. Even the best students can struggle with adjusting to the demands of a university, fall ill or need to take time off during the middle of semester for a personal reason.”
Percentage of Financial Advisors who Recommend Tuition Insurance
|Advisors who would recommend tuition insurance|
|Parent(s) or students who will need to take on student loans||78%|
|Parent(s) of a child entering their first year of college||72%|
|Students or Parent(s) of a student entering graduate school (medical school, law school, etc.)||65%|
|Students or Parent(s) of student who are going back to school after taking time off and want to finish a degree||65%|
Additional survey findings:
- Nearly half (49 percent) of financial consultants say they discuss college savings and investments the most with parents of those under 18.
- Among financial advisors who discuss college savings the most with clients, 60 percent say their clients are “extremely” or “very” stressed.
- Consultants appear to be split when asked what type of investment strategy is most important to clients who are saving for college, with 32 percent picking 529/UTMA/UGMA strategies, 30 percent picking IRA/401K/Profit sharing and 23 percent picking general stocks, bonds and cash.
Allianz Tuition Insurance
Allianz Tuition Insurance offers a range of plans to protect both in-state and out-of-state non-refundable college tuition in the event that a student withdraws from school for a covered illness, injury, psychological/mental disorder, or other reasons. One of the plans provides coverage for almost any unforeseen reason that may cause a student to leave school.*
Allianz Tuition Insurance must be purchased prior to the first day of the semester and three different plans are available, starting at only $29.95 per term. The insurance also includes Allianz Global Assistance’s proprietary Student Life Assistance, a 24/7 service that assists families in the event of an emergency.
The survey was conducted online between July 11 and 17, 2016, and 201 Financial Consultants/Advisors who have clients with children under 18 nationwide participated (N=201). Online surveys do not technically have a margin of error since a probability sample is not used. That said, the margin of error of a survey of this type using a small sample calculation would be around +/- 5.7%. The margin of error for subgroups within the survey is higher.
Allianz Global Assistance is part of Allianz Worldwide Partners, a unit of Allianz SE, a 125-year-old leader in the financial services industry and one of the world’s largest financial services companies.
Allianz Global Assistance USA
Allianz Global Assistance USA (AGA Service Company) is a leading consumer specialty insurance and assistance company. We serve 21 million customers annually and are best known for our Allianz Travel Insurance plans. In addition to travel insurance, Allianz Global Assistance USA offers tuition insurance, event ticket protection, registration protection for endurance events and unique travel assistance services such as international medical assistance and concierge services. The company also serves as an outsource provider for in-bound call center services and claims administration for property and casualty insurers and credit card companies.
*Terms, conditions, reductions, and exclusions apply. All plans not available in all states. For a complete description of the coverage and specific benefit limits offered under your plan, carefully review your declarations page and insurance policy. Insurance coverage is underwritten by Jefferson Insurance Company (NY, Administrative Office: Richmond, VA), rated “A+” (Superior) by A.M. Best Co., under Jefferson Form No. 107-P series. Allianz Global Assistance and Allianz Tuition Insurance are brands of AGA Service Company. AGA Service Company is the licensed producer and administrator of this plan and an affiliate of Jefferson Insurance Company. The insured shall not receive any special benefit or advantage because of the affiliation between AGA Service Company and Jefferson Insurance Company.
Media Contact: Daniel Durazo