The global pandemic raised awareness of how fragile life is and the importance of preparing for the unexpected.
According to LIMRA research, 41% of Americans say they don’t have sufficient life insurance coverage. Many underserved markets have even greater insurance needs, including:
- 44% of women believe they have a life insurance coverage gap
- 45% of Asian Americans say they need more coverage
- 47% of Millennials live with a life insurance coverage gap
- 48% of Black Americans acknowledge they don’t have enough life insurance
- 50% of LGBTQ+ Americans say they need (or need more) coverage
Life Insurance can play an important role in providing financial security for your loved ones in the event of a death.
Below are the top misconceptions about Life Insurance:
Life Insurance is Too Expensive – More than half of Americans overestimate the cost of life insurance by as much as threefold. This is especially true for younger generations. The cost of term life insurance for a healthy 30-year-old is around $170 per year. Yet, 43% of Millennials estimate it to be more than six times higher — at a costly $1,000.
This misperception about cost, coupled with prioritizing other financial needs, puts families needlessly at risk of financial hardship should a wage earner die unexpectedly.
My workplace life insurance is enough – One quarter (26%) of American workers believe the coverage they get through work is enough. The median life insurance coverage offered at the workplace is either a sum of $20,000 or one year’s salary. 54% of U.S. households rely on dual incomes and, for many, losing one income could be devastating to the household’s finances.
According to the survey, 44% of families would face financial hardship within six months, and 25% would suffer financially within a month.
It is too difficult to buy life insurance – 54% of uninsured Americans say they have put off purchasing coverage because they don’t know what to buy or how much they need.
Less than 1 in 3 consumers say they are very or extremely knowledgeable about life insurance.
This lack of knowledge can deter people from taking action. While working with an agent can help, 6 in 10 Americans don’t work with a financial professional.
I don’t need life insurance until I am older – Younger consumers who do not yet have a spouse/partner or dependents may believe they can put off buying life insurance. In reality, life insurance is significantly less expensive for the young and healthy. Buying a policy can protect their financial future and the financial security of their loved ones.
4 in 10 insured consumers wish they had purchased their policies at a younger age.
If you are interested in learning more about Life Insurance or reassessing your current Life Insurance policy, please connect with us. Your team of trusted professionals are here to help.
Sincerely,
John L. Jenkins, AEP®, CFP®, CFF, BPC
Gregory R. Banner, CFP®, CLU®, CRTP
Monica Szakos Cramer, CFP®, CFF, CEPA, BPC, BFA
Joshua Khokhar, CFP®
Sources:
https://www.limra.com/en/newsroom/liam/
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