Twisting Facts

In my post titled It's Hard to Save Money On Only $250,000 Income, I recently went back and forth with a reader about the media and their willingness to twist facts to make a story. We both basically agreed on the issue -- but he thought one thing of their conclusions and I thought another. However, I ran into a different instance where I think there will be more agreement.

I recently received an email from a representative of an insurance company (I know, not the media, but still someone similar in that they try to "spin" stories) that touted how people see life insurance as important but yet many do not have it. In particular, here's what was quoted to me from their recent research:

Nearly three quarters of Americans feel life insurance is important, but nearly a third are not insured, according to a new survey by [name omitted by FMF.]

Let me translate:

• "Nearly three quarters of Americans" -- less than but close to 75%. Let's say it 72% just to have a number.

• "nearly a third are not insured" -- less than but close to 33%. Let's say 30% to have a number.

• "but" -- some sort of disconnect -- the facts point one way but reality is another way.

So, given these definitions, the key part of the phrase now reads:

72% of Americans feel life insurance is important, and yet by some inexplicable reason 30% are not insured.

Does it look so inexplicable now?

All I see as a disconnect is that maybe 2% of the people think it's important and are not insured. It could be more, but it probably isn't much more (or they would have said so.) In other words, they are trying to twist the facts to make you think there's a bigger deal here than really exists.

Now I'm all for life insurance and I have it on myself and my wife. But it's twisting of facts like this that simply prompted me to remind you all to be sure you read and correctly interpret all the numbers in any written communication -- especially when it pertains to your finances.

Comments

[Brad]

"Lies, damn lies, and statistics."

I am a statistician, and am particularly easily annoyed with the way numbers are used in the media. If there is a way to make them misleading, someone will do it. It's appalling.

[broknowrchlatr]

That is hilarious. At most, the statement could be saying that 8% of Americans feel life insurance is important but do nto have it.

I have a hard time believing that over 2/3 of americans have life insurance. maybe they are saying that nearly 1/3 of those that belive it is important do not have it. That would be a much more meaningful statement. If that is the case, though, their slip in wording made it meaningless.

[MrAtoZ]

Let's hope this company's actuaries are better with numbers than their P.R. people are.

[Lord]

I think life insurance is important, for other people that have dependents, not for myself, so I am probably in that 8%.

[J at IHB and HFF]

Hello. It can make sense if 100% of a 6-person family thinks that life insurance is important and only 1 person (the primary wage earner) is insured.

[Phil]

Here is the original link for those that want to judge for themselves:
http://www.rasmussenreports.com/content/pdf/3468
I think FMF took the statistic out of context (and didn't even quote it properly) in order to mock it. The main thrust of the "article" - really a two paragraph blurb - was that women tend to be underinsured in proportion to their contribution to the household. Not that I'm endorsing the conclusions, but if you want to mock the use of statistics you can find much better examples.

[FMF]

Phil --

I didn't take anything out of context -- I didn't even see the report. I was sent bullet-point conclusions via email and the one I picked out above is one of them the company sent me (the top one, I believe.)

So, feel free to issue your apology here.

[Rick]

I don't think FMF took the statistic out of context, even given that report. Anyway, how can you take a statistic out of context? A fact is a fact. And the fact, as stated by that linked report, is that 73 percent of Americans feel life insurance is important, and 30 percent do not have it. If we can assume those who do not feel life insurance is important do not have life insurance, that leaves a spread of just 3 percent, just like FMF was talking about.

Of course, it is perhaps unreasonable to make that assumption, which is why statistics can say anything we want them to.