Many people think about financial skills mainly when it comes to saving and investing – which is understandable, because it is the most rewarding aspect to see your wealth grow.
Although financial discipline and the magic of compound interest are fundamental, it is important not to overlook the protection of wealth. Insurance plays a critical – and generally misunderstood – role in ensuring that your wealth builds will not be surpassed by a costly event or accident.
April is Financial Literacy Month, during which organizations across the United States hold events and take initiatives to improve financial literacy – especially among the country's youth. Although such awareness initiatives are important, financial competence is a long-term concern all year round – and the COVID-19 pandemic seems to have increased urgently.
Two dozen states are now considering financial literacy legislation. Advocates say that student debt and increased interest in economic inequality are behind the efforts. As of early 2020, high school students in 21 states had to take a personal economics course to graduate, according to the Council for Economic Education. It was a net gain of four states since the Council's previous bill two years earlier.
"I think the pandemic is drawing more attention to the subject," said Billy J. Hensley, President and CEO of the National Endowment for Financial Education. He noted that after the financial crisis more than a decade ago, there was also a surge in proposals for financial expertise in state legislators.
Nearly half of respondents in a survey by financial planning firm D.A. Davidson said that more education in financial literacy would have helped them manage their money better through the pandemic. The study, which surveyed 1,047 American adults, found that 21 percent thought that insurance was the subject they understood the least – second only to investments.
Triple-I provides the information and insights that individuals and companies need to make informed decisions, manage risks and appreciate the essential value of insurance. Our website, blog and social media channels offer a variety of data-driven studies, videos, articles, infographics and other resources to explain insurance.