September is Life Insurance Awareness Month, a month-long public awareness campaign sponsored by the nonprofit organization Life Happens.
According to LIMRA,* 47% of Americans say their household would face financial hardship within six months if a wage earner died unexpectedly, and 40% say their loved ones would be barely or not at all financially secure if the primary wage earner died. The same study indicates that more than 100 million Americans are uninsured or underinsured. Why do so many people put off addressing their life insurance needs? It may be due to common misconceptions, including the following:
- ‘It is too difficult to buy life insurance.’ Historically, labs, doctors’ visits, documentation and in-person meetings made underwriting feel lengthy and cumbersome. Since the COVID-19 pandemic, many insurance companies have streamlined underwriting by using technology and electronic signatures. In some cases, younger and healthier applicants may not need a medical exam, making the process faster and less invasive.
- ‘My workplace life insurance is enough.’ A life insurance policy through work can be a valuable benefit, but it may not fully meet your long-term needs. There are several reasons to consider additional coverage outside of work:
- Insurance portability — If you lose or leave your job, your workplace coverage may end. To maintain coverage, you may need to apply for a new policy, which could be more expensive or harder to obtain depending on your age and health.
- Your coverage may be lacking — Your workplace life insurance may not provide enough financial support for your partner, children or other ongoing expenses.
- You may be overpaying — In some cases, especially if you are in good health, coverage outside the workplace may be less expensive.
- ‘Life insurance is expensive.’ Many Americans overestimate the cost of life insurance by seven to 12 times,** even among younger and healthier adults. This misconception is one reason 46% of people with a life insurance need do not purchase coverage.
Life insurance benefits are not for the people who die; they are for the people who depend on them. A financial advisor can review your current coverage and help determine whether you have the right amount and type of insurance to protect your family or business if the unexpected occurs.
*LIMRA Facts About Life 2025 (Life Insurance Marketing and Research Association)
**LIMRA Life Insurance Barometer Study 2025
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.
5899595- EXP: 09/30/2029