Life Insurance: Households without it face immediate financial adversity if primary income earner dies
SEATTLE – According to LIMRA’s 2014 Facts of Life, one third of Americans believe they would feel the financial impact from the loss of a primary wage earner within a month of the wage earner’s passing. Half say they would feel an impact within six months. Younger people say they’d feel an impact sooner than older people.
The 2014 LIMRA study also reports that less than half of U.S. residents age 25 to 64 have individual Life Insurance coverage.
“Losing a loved one is tragic,” said Karl Newman, NW Insurance Council president. “You can’t plan for the emotional loss, but you can plan ahead for financial needs. With Life Insurance, you can have confidence that your family will be protected financially when you are no longer able to help.”
During tough economic times we all look for ways to save money, but if you or another wage earner dies can your family withstand the financial hardships of the lost income?
Life insurance can cover living expenses, pay off mortgages and cover college costs until families get back on their feet financially. The NW Insurance Council encourages you to consider life insurance to protect your financial future.
Life Insurance is an essential part of financial planning because it’s designed to replace the income of a wage earner who has passed away. Life Insurance also can pay funeral, burial, probate and other estate administration costs and pay current debts and medical expenses not covered by health insurance.
There isn’t a single policy that is best for everyone. The policy that meets your current needs may fall short in the future. So it’s important to keep your insurance plans up to date based on your family’s changing needs.
Also, let your beneficiaries know about your life insurance policies, who you’re insured with and where they can find the paperwork.
NW Insurance Council offers the following
Life Insurance facts to help you make informed decisions about
your family's future:
Life Insurance can be used to:
- Replace the income of a family wage earner who has died.
- Create an inheritance for your children and other family
members by naming them as beneficiaries in your Life Insurance
- Become a source of savings. Some types of life insurance
create a cash value. If death benefits are not paid out,
the policy can be borrowed against or withdrawn at the owner's
- Make a charitable contribution if you name the charity
of Life Insurance:
Term - It's the simplest form of Life Insurance. It
pays only if death occurs during the term of the policy, which
is usually one to 30 years. Premium rates often remain the
same throughout the term period; however, on some term products
the premium may increase annually.
Whole Life/Permanent - It pays a death benefit whenever
the policyholder dies. Whole or Permanent Life Insurance accumulates
cash value that grows over time and can be borrowed against
or cashed out if the policyholder decides not to continue
Variable Life - This type of permanent policy provides
death benefits and cash values that vary with the performance
of an underlying portfolio of investments.
Only you can decide which Life Insurance
plan is best for you and your family. NW Insurance Council
recommends talking with your insurance agent or company representative
at least once a year to better understand your insurance needs.
For more information about Life Insurance,
contact NW Insurance Council at (800) 664-4942 or visit http://www.nwinsurance.org.
Insurance Council is a nonprofit, public-education organization
funded by member insurance companies serving Washington, Oregon