September is Life Insurance Awareness Month.
You may be asking yourself, “what is the point?” I mean who cares, really?
According to research by LIMRA (a non profit group supporing financial services) 75% of U.S. households realize that life insurance is important and about 40% feel concerned and worried about life insurance.
So what is it that concerns us? We just don’t know enough. Most people grasp the need for home and auto but life insurance is very abstract until a family uses it.
With an increasing number of ads and telemarketing designed to sell life policies over a distance it is no wonder we don’t understand. The best way to learn is to work with a financial adviser or insurance agent who is trained. The following is a summary of what life insurance can do.
Life insurance’s primary goal is to replacce economic loss from early death, but it can do a whole lot more. Many companies have living benefit riders or accelerated death benefit riders that pay out around 75-90% of the death benefit upon a severe or terminal illness. There are also numerous other riders, or add ons, that protect against disability, changing needs, forgetting a premium and more. Talk with your agent about how you can make life insurance work for you.
A little understood benefit of life insurance is its ability to grow wealth. This is a very complex topic but some basic pointers are:
- Life insurance should not be the primary or only savings vehicle but it is a valuable way to grow money.
- Life insurance proceeds (cash value or death benefit) are accessible tax free.
- It is very powerful for the young.
- As with any money growth plan, it takes commitment.
So how do you figure out the amount of life insurance your family needs?
Although the best way is to talk with your individual agent,There are several great tools and calculators available online, like life happens. Generally with my clients I look at, any debt, income replacement needs, outstanding mortgage, and higher education for the kids/grandkids. It is also important to account for budget and overall financial goals especially in regard to cash growth through life insurance.
Particularly in light of the pandemic it is critical we be aware of life insurance and how it can help us. If you have questions, talk with your agent, If you don’t have an agent fill out the form and my office will reach out.