Life Insurance Awareness Month aims to build awareness about the value of life insurance and its role in safeguarding a family’s financial future.
According to LIMRA, 30 million families in the United States are underinsured, while 30 million are entirely uninsured. If a significant wage worker dies suddenly, the surviving family may face considerable difficulty.
So how can we contribute to closing this coverage gap? It boils down to awareness and accessibility. The fear of losing a loved one seems more real than ever since over 4 million families have already lost a member to COVID-19.
Moreover, according to LIMRA data, six in ten Americans now recognize the critical nature of life insurance due to COVID-19. And seven in ten Americans acknowledged that the pandemic had prompted them to rethink their long-term financial aspirations.
Individuals and families may be discouraged from acquiring policies due to misconceptions regarding life insurance.
Myths and Realities
Here are a few common myths and their realities that we encounter daily:
Myth: Insurance is too costly.
Reality: Premiums vary significantly by insurance type, duration of coverage, and benefit level. Individuals, however, may sift through the possibilities with the assistance of a financial advisor and pick an inexpensive coverage that is perfect for them. Life insurance premiums are based on the type of coverage and age of the insuredâ€”not income or net worth.
Generally speaking, younger people pay less per month for life insurance, while older people pay more.
Myth: I’m single or childless; life insurance is unnecessary for me.
Reality: Even if you are single and don’t have children or other dependents, there are many good reasons to consider purchasing a policy. It would help if you had income protection in case of loss of employment or other unforeseen events. Life Insurance can also help provide liquidity for significant purchases like education or a first home. This is often called Key Person Life Insurance, designed to help protect the investment of others in your life who are counting on you, both emotionally and financially.
Myth: I’m young, healthy, and don’t need life insurance.
Reality: You might not need life insurance as much as you think. There are many kinds of policies to choose from, so there is a type of policy for everyone, irrespective of age or health. It’s never too soon to start planning for the future. It’s also important to understand that health conditions can change as you age. Life insurance companies can see your claims history and charge more for life insurance as you get older or even deny coverage altogether.
Myth: Policy terms are too restrictive.
Reality: Individuals have a variety of alternatives available to them, depending on their unique financial circumstances. For instance, term plans allow customers to choose the period and quantity of coverage they want, while other insurance types, such as universal life, enable clients to control the timing and amount of premiums.
Myth: The application and approval processes are complex.
Reality: The reality is that applying for life insurance is significantly more straightforward and less time-consuming than it used to be. Often, new technology simplifies and expedites the procedure. Applications are usually filed online, and some do not need a medical examination.
Myth: The value of life insurance is determined only by the death benefit.
Reality: Numerous permanent life insurance plans, like indexed universal life, provide the building of cash value utilized for various reasons, such as paying for education or a wedding or as collateral for an emergency loan. Specific policies are also used as a source of extra retirement income (where loans and withdrawals are adequately structured), or to finance health care expenditures.
Life insurers’ efforts to automate procedures are critical since they will boost accessibility, which simplifies and expedites the process of purchasing life insurance. The pandemic and the contemporary climate have accelerated certain advancements and adaptations within the life insurance sector.
By speeding up and simplifying backend procedures, technology helps the sector increase efficiency. This results in a more straightforward experience, which benefits customer connections and, ultimately, enjoyment. With technology accelerating, we may expect even more innovations that will disrupt the insurance industry. If developed and implemented correctly, harnessing today’s digital capabilities to build and maintain personal connections with customers would provide businesses a competitive advantage and help bridge the protection gap.
The life insurance sector is critical for families and people, and consumers may better understand the value coverage can give via education. Moreover, since September is Life Insurance Awareness Month, it serves to educate customers about the value of life insurance and how it can assist secure a family’s financial future. Therefore, increasing their awareness and ability to prepare genuinely will enhance accessibility.
Pamela Hoggard is dedicated to helping people create and preserve wealth. Her
key to success is her personalized approach in assisting her clients with a broad
range of needs – from retirement solutions, such as creating a guaranteed income
for life, to healthcare, investment, and Social Security planning.
Pamela E. Hoggard is the Principal Agent for PEH Financial Services, LLC.
As an independent advisor, Pamela says, “I work exclusively for my clients, and not
for insurance companies or other financial firms. I am free to search the marketplace and
recommend solutions that are driven strictly by my clients’ needs and their best
interests. Dealing with me, clients receive unbiased, well-thought-out planning, not
a sales pitch.”
A financial professional since 2001, Pamela has the kind of in-depth knowledge of
financial markets that come from 21 years of experience helping people reach their
financial goals. In addition to three years of coursework in Business Administration at
the University of District of Columbia, she maintains a vigorous program of
ongoing education in the latest financial strategies and tax laws