The 2017 Insurance Barometer Study by LIMRA and Life Happens found that over 40 percent of Americans do not have life insurance. While life insurance is not a naturally comfortable topic of discussion— it is not only essential to provide for the livelihood of your loved ones, it can also be a great financial resource for you during good times and bad.
Unfortunately, many are choosing to forgo life insurance policies based on inaccurate information or perceptions. For example, cost is cited as a primary factor for not purchasing life insurance but a study by LIMRA identified that 80 percent of those who decide not to purchase misjudged the price of life insurance by up to 213 percent.
As September has been designated as Life Insurance Awareness Month, it is perfect time to share some quick facts to raise awareness and understanding of how life insurance can not only protect your loved ones but build your legacy and provide financial resources in the future.
- Life insurance can protect your family and loved ones financially in the event of your own premature death. While many believe that their employer insurance policy will provide sufficient coverage, studies suggest that up to 48 percent of families would see a life insurance need gap of up to $200,000 in the event of their passing.
- Certain permanent life insurance policies build cash values that can support your family but also be borrowed against during your living years for a number of expenses such as new business investment opportunities, long-term care costs or even for a loved one’s college tuition. These policies can even be used as a supplemental retirement income source to protect against market volatility.
- Life insurance policies provide your beneficiaries with a typically tax-free death benefit when you die. These funds can be used to leave a legacy to your loved ones or to pay the taxes that may be due on your estate. Additionally, certain permanent policies can provide a tax-free loan from the cash values to fund unexpected expenses during your living years.
- Life insurance is not just for the established professionals with a large family expenses. Life insurance may help Gen Xers and Millennials carrying large student loan or private debt protect cosigners and family from this financial burden in the event of their unexpected passing.
- Determining the right level of coverage for you and your family’s needs is critical to ensure that you are not paying for protection you do not need nor leaving your loved ones un-protected. You can use this free life needs estimator from Prudential to calculate your expected life insurance needs.
There are a number of great free resources to learn more about life insurance. While these resources provide great preliminary research, every individual’s situation is unique. The best way to determine what life insurance coverage you need is to sit down and discuss your goals and priorities with a qualified risk management and insurance professional.
If you have any questions or would like to discuss your own coverage needs, contact me at email@example.com or at 410.583.5449.