Everyone knows that life
insurance is a vital part of life, although many choose
not to implement a policy.
It may be because life insurance can be a difficult
topic for many since it deals with thinking about death.
But as hard as those feelings may be to come to terms
with, Americans must realize the value of having a life
insurance policy; not for them, but for the benefit
of their family.
Leaving a family behind with no income is one of the
most selfish things a person can do, so now is the time
to protect them should something happen to you.
An October 25, 2006 article by Humberto Cruz, “Protect
loved ones – review your life insurance,”
discusses the importance of implementing a policy as
well as reviewing your current one to make sure you
have ample coverage.
“Americans seem to understand this but few do
much about it. Research by the National Association
of Insurance Commissioners shows that nearly two-thirds
of young
families believe it is ‘very important’
for both spouses to have life insurance, but most of
the time neither one does.”
The article starts out by telling the story of three
men who unexpectedly died either without a life insurance
policy, or with a limited policy, such as $30,000 that
did little more than cover funeral expenses.
They left their families without any financial
security and they were forced to get hand-outs from
family members, friends and even acquaintances.
“These men loved their families in life, but they
failed them in death. Out of inertia, ignorance or not
wanting to think about it, they committed a most selfish
act by failing to plan for what would happen when they
died.”
“It's not just the men who need to plan. The woman
is a major (or only) breadwinner in many families, and
even the death of a stay-at-home wife can create burdensome
housekeeping and child-care expenses.”
That is why it is so important to start thinking about
a life insurance plan right away. Although life insurance
is not as vital for singles or young people, it still
has importance. “Young singles with no dependents
have less need for life insurance. But many should still
consider it because they could obtain lower rates without
worrying about qualifying medically for a policy later
on.”
According to the research, only 40 percent of people
who actually have a life
insurance policy in place actually review every
year. SO although these people are being smart, they
could have inadequate coverage like the man discussed
above.
“If we haven't done it before, before paying the
renewal premium we should update our policies to reflect
any major changes in our lives, such as marriage, the
birth of a child, divorce or the death of a spouse,
said Catherine J. Weatherford, CEO of NAIC.”
When reviewing your policy, or taking out a new one
all together, just start out be determining how many
people are financially
dependent on you, and any major expenses that you foresee
in the future.
Experts say that a good guideline is to multiply your
salary by 10 or more, and this will be the amount of
coverage you should get, although it always depends
on your specific situation.
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