By Dan Schulte, Senior Vice President and Manager, Annuities and Insurance
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September is Life Insurance Awareness Month which is a month-long public awareness campaign sponsored by the nonprofit organization Life Happens.
According to the Life Insurance and Marketing Research Association (LIMRA), 42% of Americans say their household would face financial hardship within six months should a wage earner die unexpectantly and 25% would struggle financially within a month.* The same study indicates there are over 102 million uninsured and underinsured Americans. Why aren’t people addressing their life insurance needs? It’s possible people are reluctant to purchase life insurance due to some common misconceptions listed below:
- ‘It is too difficult to buy life insurance.’ Historically, labs, doctors’ visits, documentation and in-person meetings have made the whole underwriting experience lengthy and cumbersome. Because of the pandemic, many insurance companies have implemented streamlined underwriting programs to improve the process. Some insurance companies have adapted these programs to utilize technology and electronic signatures to improve the process. In some cases, younger and healthier applicants are not required to complete a medical exam. These improvements have resulted in a less invasive and speedier process.
- ‘I don’t need life insurance until I’m older.’ According to LIMRA, 4 in 10 insured consumers wish they had purchased their policies at a younger age.** This is because life insurance is significantly less expensive for the young and healthy.
- ‘My workplace life insurance is enough.’ Those who have a life insurance policy through work may think it is enough to keep them covered. While this may be a good start, there are other reasons to consider a policy outside of a work, including:
- Insurance portability – If you lose or quit your job, the life insurance coverage might also disappear. If so, to retain coverage you will have to apply for a new policy, which could be more expensive or be more complicated because of your age or current health state.
- Your coverage may be lacking – Your work life insurance policy may not provide the financial coverage you need for your children, you partner, or the bills you have to pay.
- You may be overpaying – In some cases, you could get a less expensive life insurance plan outside of your work life insurance plan, especially if you are in good health.
- ‘Life Insurance is Expensive.’ Despite the misconception that a life insurance policy is costly, term life insurance costs are typically pennies on the dollar, especially for younger insureds. For example, sample annual term life insurance rates are listed below:
40-Year-Old Preferred Non-Smoker/$1,000,000 Death Benefit
| Term Period | Male | Female |
| 10-Year | $440 | $384 |
| 15-Year | $560 | $470 |
| 20-Year | $750 | $610 |
| 30-Year | $1312 | $1028 |
Note: Premiums are estimates from Protective Life Insurance Company. Rates will vary by carrier and underwriting. All products are not available in all states.
One thing to remember is that life insurance isn’t for the people who die, it’s for the people who live. Don’t let your family suffer financially should the unexpected happen. Your financial advisor can review your situation and current insurance policies to ensure you have the proper amount and type of insurance to protect your family or business should your income be halted due to an unforeseen death.
*LIMRA Facts About Life 2021
** LIMRA Life Insurance Barometer Study 2021