Life Insurance – It’s Not About You

Life Insurance is not about you…it’s about those who depend on you.

With the beginning of the New Year, it’s a great time to reflect on the past year with the goal of making improvements. Could be our eating habits, exercise regime, financial planning and so forth.

But there are some things we don’t plan for:

For instance, no one is planning to have a heart attack tomorrow, or get a cancer diagnosis, or accidentally step out in front of a bus. As an insurance professional, every day I help clients prepare against the financial impact of loss. I am trained at identifying risk and I have a fiduciary responsibility to recommend possible steps to prepare for the unthinkable. I talk with a lot of other agents like me and life insurance & the need of having life insurance is often a topic that our clients would rather not think about. Maybe they think about it, but it’s often put on the back burner.

I remember reading an obituary a couple of years ago on a man who died at the age of 30. He was a husband & a father with several young children. The obituary stated how much the deceased loved his kids and was most proud of taking care of their needs. Ironically, at the end of the obituary, in lieu of flowers, the family requested help in funding the children’s college funds. I can only image how difficult it must have been to make that request.

A more recent example I saw… A widow setting up a “go fund me” account because her husband passed away unexpectedly. He did not have any life insurance and left her debt. I don’t know the reasons why he did not have insurance, but I wonder if maybe he just never got around to it.

I’m sure that if these dads could have a do-over, one of the things top on their list would be to purchase life insurance to make sure they could control the financial well-being of their families.  

Here is some sobering life insurance Statistics

  • About 40% of people surveyed say they would have immediate financial trouble if the primary wage earner in their household died
  • Over 50% of U.S. households lack adequate life insurance coverage

So, who needs life insurance?

  • First question…If anyone will be financially devastated by your death, you need it

Most recognize the need to have life insurance on the primary wage earner. But what about the financial hardship created by the loss of a stay-at-home parent? Should something happen to the stay-at-home parent, the surviving spouse soon would find himself or herself as the primary income earner and the primary childcare provider, while also coping with the loss. Life insurance is a crucial step in planning for you and your family’s future.

  • But what if you’re young and do not have any dependents do you need life insurance?

Couple of things to think about:

  • While you’re young & healthy…your life insurance costs will never get better than it is now.
  • Who knows what the future has instore – you may have dependents later in life and why not lock in good coverage while you’re young & heathy at much lower costs.

For those that do have some sort of life insurance – they’re probably set, right?

It depends. Maybe you have a 20-year term life policy, and you have 5 years remaining. Most term policies have conversion provisions where you are able to convert the current policy into a permanent policy.

Or maybe you have life insurance through your work benefit’s package. These policies are typically not portal (you can’t continue coverage) if you leave your employer. It is best to have your own policy that is not dependent on your work/job status.

If you are in this boat, I would recommend you have a licensed life insurance agent to review your current rights to see what type of options are available to you.

The one big takeaway?

Planning for our death is not a fun task. But while we are still in the “New Year’s Resolution” phase, I encourage you to think about your current situation. If something were to happen to you, will you have to ask others to help educate your kids or will you have a plan in place to adequately cover their financial needs?


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