September is National Life Insurance Awareness month which perfectly aligns with National Preparedness Month. Interest in life insurance is at an all-time high and we saw this uptick coming throughout the pandemic. There is, however, a gap between how many need coverage and how many have it. This is the main reason why Life Insurance Awareness Month exists. If you or someone you care about needs to know more about life insurance, let's unpack the things we should know.
National Life Insurance Awareness Month is nearly 20 years old, but life insurance goes back much further than that.
While Life Insurance Awareness Month has been running for more than 20 years, life insurance has existed much longer. In fact, the first life insurance company in the United States began in 1759 to support women in the church whose minister husbands had died.
Life insurance isn’t as costly as you might think.
The LIMRA study reports that more than half of Americans, especially younger people, overestimate the cost of insurance by as much as threefold. The misperception that life insurance is too expensive can put families at risk of financial hardship should a wage earner die unexpectedly.
Anytime is a good time to get covered.
Like home or car insurance, life insurance requires planning—once you need it, it’s too late. Even before the pandemic began, one in three families reported they would have financial issues within a month if the primary wage earner died. Yet nearly half (46%) of people are uninsured, per the LIMRA study, and even among those with life insurance, many say they don’t have enough coverage. Life insurance can’t wait, and there’s no time like the present to buy.
Calculating your life insurance needs is a good place to start.
Life insurance has no strings attached, so your family can use it to cover day-to-day expenses, pay off debts, save for college, and more. Deciding how much you need is an excellent first step if you’re considering getting covered.
Every family’s needs are different, so think about how much yours would need to stay financially secure if you died. A few questions to consider:
- How much debt do I have?
- How much do I have in savings?
- Who do I want to protect?
- How long would they need financial support?
If you’re already covered, take the time to do an annual checkup.
About 43% of policyholders in the LIMRA study say they either don’t have enough life insurance coverage or don’t know. As your life changes, you should make sure that your life insurance policy changes with it if needed by doing a life insurance review.
Check your beneficiaries regularly to prepare them to receive the payout. For example, if you get divorced and remarried, forgetting to update your plan can mean your ex-spouse receives the payout. If you have term life insurance, keep track of when your coverage ends to avoid gaps. Have you experienced any significant life changes since you bought your policy? Life changes like getting married, changing jobs, buying a house, or having children, might inspire you to consider changing your policy.
Finally, ensure that your loved ones know where to find your life insurance policy and what they need to do to collect their death benefit. And if you find yourself taking care of the financial affairs of a loved one who passed away, you have several options for finding the life insurance policy of a deceased person.
Life Insurance Awareness Month happens once a year, but the need for financial security never stops. Getting the facts about life insurance can help you rest easier knowing that your family is protected when they need it most.
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