Although life insurance should be a vital part of every person’s financial portfolio, many people have trouble understanding the importance of having a policy in place.
After all, thinking about what would happen to your family members and loved ones should something happen to you is not anything that anyone wants to deal with or discuss.
But it is something that everyone should have, and enacting the policy is actually quite simple once you understand the different products and policies available out there.
A recent article posted on Newyorklife.com, “Why life insurance?” discusses the importance of the coverage and some background information to help readers get started on their journey with life insurance.
If you are reading this and do not have an insurance policy in place already, you may be asking yourself, Why would I need a life insurance policy? Well, there are actually a variety of different answers to this all-important question.
“The first step to learning about life insurance, is understanding its necessity and importance. Life insurance is essential for a number of different reasons. It is a financial instrument that allows you to protect your family and loved ones when you're gone and also a tool to finance your objectives from education to retirement while you are alive.”
In addition to providing complete financial security to your beneficiaries, a life insurance policy can also help you build your own wealth while you are alive. A life insurance policy can also be used to: “Supplement your retirement, help cover the expenses of raising your children, help pay for your children's education, preserve your estate and safeguard your home mortgage.”
After understanding all of these great benefits from a life insurance plan, you would think that every American would have already taken the time to take a policy out; but this is actually quite untrue.
In fact, many of the people who actually have policies out do not have enough coverage to provide income for their family to maintain their current standard of living right now.
The amount of coverage you need all depends on your income, marital status and the number of dependents; among a number of other factors.
“The government recommended approximate payments of 12 times income for couples with no children and 20 times income for households with children. The average life insurance need is about $459,000, but the average amount of life insurance owned is $126,000. The average underinsurance is more than $300,000.”
Most people who have life insurance do not even realize that they need more, and the people who do not yet have a policy in place are even worse off.
“Despite evidence of being underinsured, only 29 percent of households feel they need more life insurance coverage. Even more affluent households (>$100,000 household income) lack sufficient life insurance, yet say they have sufficient coverage.”
A life insurance plan gives your beneficiaries the peace of mind and financial security that they deserve.
Consult an LEI life agent today for any questions you may have about enacting a life insurance policy.
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