UPDATED: Mar 26, 2020
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September is Life Insurance Awareness Month. Did you order the cake and Mylar balloons?
O.K. I don’t really expect you to celebrate it, but I hope you’ll be open to revisiting the importance of life insurance and how it can give your loved ones peace of mind.
Life insurance provides a safety net, ensuring your family can make ends meet if the unthinkable were to happen to you. Would those who mean the most to you be able to continue to pay the bills, keep food on the table, and get an education if your paycheck were gone?
All in all, I believe people realize the value of life insurance. Many don’t pursue getting policies, however, because they either don’t know how much coverage they’ll need or they assume they won’t be able to afford it.
If one of those reasons is holding you back, don’t let it intimidate you and keep you from protecting your family.
How Much Life Insurance Coverage do you Need?
Everyone’s situation is unique, so there’s no magic formula to determine your needs. It takes sitting down and reviewing your financial situation.
When deciding how much life insurance to apply for, consider your
- Expenses – including mortgage payments, funeral costs, loan payments, tuition expenses, etc.
- Income needs beyond the expenses mentioned above.
- Assets – including savings accounts, 401Ks, IRAs, pensions, etc.
- Spouse’s income.
- Other life insurance policies – like those provided by an employer.
After you’ve taken inventory of all that, you can estimate your life insurance needs by using a good Life Insurance Needs Calculator.
Can You Afford Life Insurance?
The misconceptions about life insurance premiums scare a lot of people away. According to the LIMRA and LIFE Foundation 2013 Insurance Barometer Study, 86% of uninsured people haven’t purchased life insurance because they think it’s too expensive, but they’re overestimating its true cost by over double.
That’s some serious misunderstanding about the cost of life insurance!
The truth is you have many options. Term life insurance, in particular, provides a lot of flexibility so you can more closely align your needs with your budget. Compared to other forms of life insurance, term life enables you to purchase the greatest amount of coverage for the lowest premium.
Unlike permanent (whole and universal) life policies, term life policies provide coverage for a period of time (a.k.a. the policy term). Your beneficiaries will receive a payout if you die before the term has expired. Typical terms are 10, 15, 20, 25, and 30 years, but you could get a five-year or even a one-year term policy. The shorter the term, the lower your premium.
To find out how much a term life policy would cost you, you can get a quote quickly and easily online.
Besides its affordability, term life insurance provides versatility. Within a certain period during your term, you have the option to convert your term life policy to a permanent policy. Although this option would increase your premium, the coverage that would have ended at the close of that term then continues for life.
Is Your Household Among the 70% Without Life Insurance in the U.S.? Why?
It’s true; 30% of U.S. households do not have life insurance. Plus, 50% say they need more life insurance.*
If you’ve procrastinated in taking a serious look at how to protect your family’s well-being with a life insurance policy, what better time than Life Insurance Awareness Month to get started?
After you discover how affordable a term life policy can be, you might feel like celebrating after all.
*Source: LIMRA Facts of 2013