NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
22 May 2025
Learn what stagflation could mean for your finances and how to tell if you need life insurance. Do you still need life insurance if you’ve built enough wealth? What does stagflation mean for your financial plan? Hosts Elizabeth Ayoola and Sean Pyles discuss how to determine whether your life insurance coverage still fits your needs and what to watch for as economists warn about potential stagflation. First, along with NerdWallet senior news writer Anna Helhoski and inflation expert Taryn Phaneuf, they break down how to think about your financial protection in uncertain times, discussing stagflation—what it is, why it’s so rare, and what signs to look for now—and offering tips on monitoring inflation, adjusting your savings strategy, and reducing high-interest debt. Then, listener Adam joins Sean and Elizabeth to explore whether increasing umbrella insurance means he can lower his auto coverage, when to switch to a group life policy through work, and how to estimate college savings needs for three kids. They discuss comparing life insurance policies, how to factor net worth into coverage decisions, and why regular insurance check-ins are key. Use NerdWallet’s free tool to compare life insurance quotes and find the right coverage for you and your family https://www.nerdwallet.com/insurance/life/life-insurance-quotes In their conversation, the Nerds discuss: life insurance vs net worth, term life insurance, umbrella vs collision insurance, when to update life insurance, group life insurance policy, employer life insurance coverage, best life insurance for parents, convert group life insurance, stagflation, what is stagflation, signs of stagflation, stagflation 2025, Consumer Price Index April 2025, high-yield savings accounts inflation, saving during inflation, emergency fund inflation, umbrella insurance minimums, collision coverage and umbrella insurance, auto insurance comparison, saving for college with 529, 529 contribution calculator, estimating college savings, tuition benefits, financial checklist after remarriage, insurance tips for high net worth, choosing term vs whole life, how to save on insurance, switching insurance after marriage, family insurance planning, life insurance for spouse, when to drop term life insurance, inflation trends 2025, how to prepare for stagflation, and Federal Reserve inflation targets. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices
Full Episode
Life insurance. You've probably been told you need it, but do you? And if so, how do you know what kind to get? Today, we help a listener figure out whether umbrella insurance is enough. Welcome to NerdWallet Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Elizabeth Iola.
This episode, we answer a listener's question about life insurance. But first, our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money. And today we're asking what it means if the economy enters into something called stagflation. Our news colleague, Anna Hilhoski, is here to explain more. Hey, Anna.
Hey, Elizabeth. To learn more about stagflation and what's happening with inflation right now, we're joined today by my news colleague, Taryn Phaneuf, who tracks all things prices and inflation. Welcome, Taryn. Hi, Anna. Thanks for having me. So first off, what is stagflation and how is it different from regular inflation?
Stagflation describes a rare set of circumstances in the economy when inflation and stagnation occur at the same time. Inflation, which is something we're all pretty familiar with, is the rate at which prices increase. A little inflation is seen as a sign of a normal, healthy economy, and the Federal Reserve targets a low, stable inflation rate of around 2%.
But when prices rise too fast, it makes it hard for consumers and businesses to keep up. Then there's stagnation. That describes an economy that is basically stalled. It's experiencing little, if any, growth. In a situation like that, demand in the economy is very low. Businesses have pulled back and they might even be cutting staff.
Consumers are spending less money because they're unemployed or they're worried about being unemployed. And when demand is low, prices tend to fall. So as you've probably realized, inflation and stagnation don't usually go hand in hand. With inflation, the economy is running hot, but with stagnation, it's slowing down. So when these two things happen simultaneously, it means that something is off.
What are some of the signs that stagflation is happening in the economy?
Economists look for some key signs. Are prices rising? Is productivity slowing or flat? Is unemployment going up? If all these things are happening, that's a recipe for stagflation. Wages factor in as well. If wage increases are keeping pace with prices, consumers have a better chance of weathering the storm. But it's unlikely that wages will increase if productivity slows and unemployment rises.
And how does stagflation affect consumers?
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