Would you believe that 1 in 5 families with children under age 18 does not have life insurance? As shocking as that may be to many of us, a 2018 study by LIMRA, a leading insurance and financial services trade organization, also found that 3 in 10 families would be in immediate financial trouble if a primary wage earner died. And, nearly half of respondents would experience financial adversity in just six months.
LIMRA estimates that 48 percent of U.S. households are underinsured by an average of $200,000.
Sadly, the LIMRA’s 2018 survey found that the most common reason respondents gave for not buying insurance was they incorrectly believed it was too expensive. Indeed, most estimated the cost of a $250,000 policy for a healthy 30-year-old at three times its actual cost of an average of $160 a year – the monthly cost for many common expenses. Life insurance prices, especially term life, have remained at affordable levels while other daily expenses have increased.
Now is an ideal time to re-examine the amount of life insurance you and your family have in force.
Most people put off this task for one of two reasons:
- The thought of losing a loved one is difficult to handle. It makes people uncomfortable to consider a world without that person in it.
- They find the task too complicated and burdensome.
Let’s address the second part first by admitting that for many people, deciding what type and how much life insurance to buy is complicated. That’s why consulting an independent insurance agent is so crucial to the process.
An agent can help you consider the right questions. For example: