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Life Insurance Awareness Month

Life Insurance Awareness Month

September 07, 2023

September is Life Insurance Awareness Month. This is an annual campaign designed to educate Americans about the importance of having life insurance protection and how it can help provide financial security for families.

Why is this important?

  • In 2022, 106 million American adults were without life insurance or were underinsured.
  • In 2022, 47% of all people in the United States have no life insurance protection.
  • More than 50% of Americans overestimate the cost of life insurance by 300%.
  • 30% of Americans believe life insurance is only for end of life expenses, leading them to not purchase enough protection to provide income replacement for a surviving spouse or family member that relies on their income.
  • Many people wrongly believe that a group life insurance policy through their employer is sufficient, not realizing that if they leave their employer (or get downsized), they will more than likely lose their coverage.


Life Insurance myths and facts:

Myth 1: Life insurance is only for healthy, middle-aged adults.

Fact: You are never too old or too young to purchase life insurance. It’s true that your costs will generally increase as you age and that people with illnesses or certain risk factors may pay more, but there are life insurance policies available for everyone.


Myth 2: I’m single or married with no children, so I don’t need insurance.

Fact: Your loved ones can use life insurance benefits to pay off your debts, including student loans, mortgages, and car loans. It can also be used to take care of your final expenses, such as burial. And, with some newer policy, life insurance can provide you with Accelerated Living Benefits (think at home care, assisted living and nursing home expenses).


Myth 3: My student loans will be forgiven when I die, so I don’t need life insurance

Fact: To keep it simple, it depends on the type of student loans you have. Federal student loan debt is forgiven upon death or total disability, and family members are not responsible for it. In this case, a life insurance payout could go to other things such as living expenses or funeral costs. 

Private student loan debt can be different and is not as cut and dry. You’ll need to ask your lender if they provide student loan death forgiveness, which will give you a better estimate of how much life insurance coverage you need.


Myth 4: My beneficiaries will have to pay income taxes on the proceeds of my life insurance.

Fact: Life insurance benefits are generally income tax-free up to a certain threshold, according to the Internal Revenue Service (IRS).

Myth 5: Once my children are adults, I don’t need life insurance.

Fact: Having life insurance later in life has many advantages, like relieving the burden of funeral costs, paying state estate taxes, paying off your debt or simply giving your children a nest egg they can use to help support their own families.

What about your surviving spouse? If you were to pass away, would they be completely debt free, mortgage free, and have enough to sustain the standard of living they currently have?


Myth 6: I don’t need life insurance since my savings is at a comfortable amount.

Fact: The national median cost of a basic funeral with a viewing and burial is $7,848, according to the National Funeral Directors Association. Your savings were likely for retirement, so your loved ones may have to pay for your funeral costs if there is not enough left over. Additionally, if you have any debts, your estate will use your savings to pay for those, which could reduce the amount left for your beneficiaries.


Myth 7: I can’t afford life insurance.

Fact: Consumers often overestimate the cost of a term life insurance policy. Many individuals are surprised to learn that a healthy 30-year-old could potentially get a $250,000 20-year level term policy for just $13 a month. With this policy, beneficiaries would receive the full $250,000 (as most are tax-free).

Life insurance can be very affordable, depending on the type and amount of coverage you need.


Myth 8: I draw no income, so I don’t need life insurance.

Fact: If you’re a stay-at-home parent, you don’t bring in an actual paycheck, but you likely provide services that could cost a lot of money to replace, such as child care, daily transportation, cooking and more. Life insurance benefits can help replace some of these costs.


Myth 9: If you have health issues, you cannot get life insurance.

Fact: While health is often used to calculate rates and coverage amounts when determining a policy’s premium, it doesn’t mean that life insurance is out of the question with a pre-existing condition.

Some types of policies bypass the standard health requirements for life insurance policies. These policies may forgo medical exams and use only limited medical questionnaires. Depending on the provider, the plan may require that you be at least a certain age, but outside of non-health parameters like that, these policies generally make it easy to qualify. The downside is that they tend to cost more and have lower coverages than some more restrictive policy types.


Myth 10: I already have life insurance. I don’t need anything help.

Fact: Life insurance rates and programs change frequently. A policy you might have obtained a couple of years back may not be adequate for your needs today. For example, did you buy a home? Have a child? Get married (or divorced)? Does your policy include Accelerated Living Benefit protection?

Hopefully, you review your home and auto insurance coverages every year, but when was the last time you reviewed your life insurance protection?


What’s the next steps?

  • Get an estimate of how much life insurance could cost you. Click on this link to be taken to a page where you can input some basic information and get an estimate of what life insurance could run you.

  • Then / Or, get on my calendar and let’s have a brief discussion to determine how much coverage you actually need (your true needs), and let’s submit a no obligation application to see if we can get you qualified for proper protection.


Contact me if you have further questions. I look forward to speaking with you soon!