Even though most people appreciate the value of life insurance, many avoid buying it. According to the 2019 Insurance Barometer Study by LIMRA and Life Happens, life insurance ownership has declined from 63 percent in 2011 to 57 percent in 2019. Research shows that a lack of coverage severely affects many American families. Four in 10 households without life insurance would have immediate trouble paying living expenses if their primary wage earner died. The crux is that thinking about, talking about, and understanding the reasons for buying life insurance are all excellent financial planning considerations. However, discussions around death and mortality make most individuals uncomfortable, resulting in a delay in purchasing the coverage they need to help ensure their loved ones have enough money to meet future financial obligations. Here are a few more common reasons why people who need life insurance don’t get around to buying it, which you may relate to.
Reason #1: Getting Stuck in the Shopping Process
Navigating the complex world of life insurance can be overwhelming. Very few individuals genuinely understand life insurance: why we need it, what type of policy is best, how much we need to buy, when benefits are paid, how benefits may be taxed, and much more. The right professional team can guide you through selecting the policy best suited for your needs, budget, and financial objectives.
Reason #2: Lack of Understanding About Coverage
This general lack of understanding often leads to insufficient coverage. Education about life insurance and related products is critical to helping people get coverage. They will only be motivated to buy the coverage if they understand what it is and, more importantly, why they need it. Overestimating the actual cost of coverage may deter many from purchasing it.
Reason #3: Other Financial Priorities
For many individuals, it’s not that they don’t want the life insurance they need, but it may be challenging to find the extra dollars to pay the premiums with all the other financial demands on their budget. The fact is that by buying life insurance, you can’t afford benefits to anyone. That’s why it’s essential to leverage the experience of insurance and financial professionals who can help you consider policies that meet your needs and fit your budget.
Reason #4: Navigating the Maze of Choices
There are many types of life insurance products available. These include term life insurance policies and various permanent (cash value) life insurance policies. Several different types of permanent life insurance are available, having:
- Whole life insurance
- Universal life insurance
- Indexed Universal Life Insurance
- Variable life insurance
- Variable universal life insurance
The Bottom Line
Here are five good reasons you should consider buying life insurance:
- To provide continuing income for your family members
- To pay off debts
- To pay final expenses and taxes
- To provide an estate for your loved ones
- To leave money for charity
Contact us today to help you understand how life insurance can secure your family’s financial future.
The opinions and other information in the commentary are provided as of August 12, 2020. This summary is intended to provide general information only and may be of value to the reader and audience.
This material is not a recommendation of any particular investment strategy, is not based on any specific financial situation or need, and is not intended to replace the advice of a qualified attorney, tax advisor, or investment professional.
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Sections of this article were prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer to avoid penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on their circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable – we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. There may be surrender charges at the time of surrender or withdrawal, and they are taxable if you withdraw more than your basis in the policy. Any guarantees are contingent on the issuing company’s claims-paying ability and financial strength. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Life insurance policies have exclusions, limitations, and terms for keeping them in force.