This report describes a cognitive interview evaluation of (a) proposed new questions (drawn primarily from the Survey of Consumer Finances (SCF)) for the Survey of Income and Program Participation (SIPP) on the value of annuities and trusts, and (b) existing SIPP questions on the cash value of life insurance policies. The interviews uncovered many aspects of these questions which caused respondents difficulty: (1) There was a marked tendency for the “annuity” question to elicit reports of out-of-scope, pension/retirement-type accounts. (2) Although the “trust” concept seemed well understood, there were many difficulties with its sister concept, “managed investment accounts.” Among other problems, respondents tended to interpret these words not as a specific investment vehicle, but rather a broad category label, causing them to report out-of-scope investments (e.g., mutual funds). (3) Because of the possibility of joint ownership, questions about the cash value of an annuity or trust for an individual must communicate the concept of the person’s share of the cash value. In our study, however, use of the word “share” tended to elicit reports in percentage terms, rather than dollar values. (4) Most respondents were unfamiliar with the different types of life insurance and their labels – “term,” “whole life,” and “universal life.” (5) The face value concept itself was unfamiliar and confusing to many respondents. The paper proposes possible solutions for all of these problems, again drawing on many procedures which have been used successfully in the SCF in response to similar issues.
Source: U.S. Census Bureau, Statistical Research Division
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