Life Insurance is More Affordable than you Might Think
January 7, 2013 
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In a 2012 study, more than 80% of respondents cited financial reasons for not having enough life insurance coverage to meet their needs, yet they overestimated the cost of life insurance by almost three times the actual price.1 Therefore it may not be surprising that life insurance ownership is at an all-time low and those that have life insurance believe they still need more coverage. 2–3
This is one situation in which a little information might go a long way. Because people are living longer today than they used to, the cost of basic term life insurance has dropped by almost 50%. This may be a good time to consider purchasing additional protection for your family.4
Preparing for a Certainty
As you know the only thing that is certain is death and taxes. Every four years as we select a new president, and more recently the last six months of focus on the Fiscal Cliff, we spend more time focusing on the taxes we pay. This has made it even easier to ignore the inevitable fact of death, especially when you may be young and healthy. But wait… young and healthy is usually when life insurance is most affordable. Even those people who may be older or have medical issues may be surprised at how cost-effective a life insurance policy might be for them.
Have you considered what would happen if you were no longer able to provide for your family due to your death?
- Would they be able to continue to have the same level of lifestyle you’ve been able to provide for them?
- Would your children still be able to pursue college?
- How would this challenge the retirement lifestyle of your spouse?
Have you done anything to prevent these concerns? Have you had your plan reviewed recently to take advantage of the reductions in life insurance costs? A life insurance policy with the appropriate level of coverage would help your family live the way you would like them to even if you were not around to provide for them.
Types of Life insurance
The two basic types of life insurance are Term and Permanent. Term life insurance offers a death benefit if the insured dies within a specified time period. Term is usually the least expensive and may offer low-cost coverage appropriate for your specific needs.
Permanent life insurance offers a death benefit on the insured person’s life as long as they continue to pay the premiums. Permanent life insurance comes in two types, Universal or Whole life and each type can have different features. One of the secondary benefits of these policies is the ability of the policy to build up cash value that you can use if needed as tax-free supplemental income when you retire, or other needs your family may have.
It’s common for people to have term life insurance through their work. These plans are usually limited to a multiple of their salary. However, when you leave your employer the coverage ends or it becomes extremely expensive to continue to keep in force. Having your own individual policy could provide protection for your family regardless of any career changes.
What Should I do Next?
If financial concerns have held you back from obtaining the life insurance coverage your family needs, now is a good time to investigate all the available options. The best resource to learn about these options is a life insurance agent specializing in life insurance solutions. Many times, these specialists may refer to themselves as Retirement Income Specialists or Retirement Advisors that solely specialize and assist clients in life insurance, annuity and retirement planning.
A great resource to find these specialists is Annuity123, which has a free matching service for consumers of all ages to find retirement income specialists in their area. Once you find that professional who is knowledgeable, make sure to ask lots of questions and find out the potential pros and cons of the policies they may recommend for your specific situation. Finally, make sure you do plenty of research and get educated on life insurance. It could be the best thing you ever did for your family!
1, 3, 4) LIFE Foundation, 2012
2) LIMRA, 2011
