According to a recent study by LIMRA and Life Happens, in January 2024, 51% of consumers reported owning life insurance, down significantly from 63% in 2011. Among life insurance owners, 22% say they do not have enough coverage. And 42% of American Adults (representing 102million people) say they need, or need more, life insurance.*
In the same study, the most common reason for not having life insurance, or not having more coverage was due to the assumption it was too expensive.*
While life insurance does have a cost, it could be money well-spent for all the protections it can provide. Afterall, what will happen to you and your loved ones in the case of an unforeseen illness or death? If you don’t have life insurance at all, or no longer have enough coverage for the current life stage and obligations you have, it’s time to start or revisit your policy. Here are a few ways life insurance can protect those who matter most to you:
What Life Insurance Protects Against
- Life insurance can help family members keep up with childcare costs and college tuition, pay for basic needs like food and shelter, and even cover expensive medical bills or funeral and burial costs, after a provider has passed away. It’s important to make sure your life insurance properly accounts for all your financial needs today, and that all beneficiaries are up to date. If your relationship or family status has changed due to marriage, divorce, a new child, or a deceased loved one, it’s time to make sure everything is set as you want it to be and to double-check for accuracy once a year.
- Even in a competitive housing market with limited inventory, people are still moving into new homes. Often, a new home purchase means increasing one’s debt. Ensuring you have enough life insurance to cover any new liabilities is critical for the financial future of you and your loved ones.
- If you have hopes of a family business staying in the family after you’ve passed, developing and updating a succession plan is critical to ensuring the business can move to other family members without too much of a financial burden. Life insurance can help cover certain taxes that are applied when passing a business to the next generation.
- Believe it or not, life insurance can also be tapped while a policy owner is still alive, for things like retirement income stream or covering costs related to a terminal illness, to be used in addition to other vehicles like long-term care insurance or disability insurance.
“Unfortunately, many people, especially those who are earlier in their careers, don’t prioritize life insurance. They are understandably thinking about paying off student debt and saving for a home, family, or travel,” shared John Uyeki, SVP, Director of Financial Services, Chelsea Groton Bank; Financial Advisor, Osaic Institutions, Inc. “The younger and healthier you are, the more cost-effective it is to purchase life insurance, but many people settle for the life insurance provided by their employer, which expires once they leave a job. As they move from job-to-job they naturally age and the cost of life insurance rises.”
“Our goal is to ensure all people, including this younger generation, begin to invest in their retirement. As soon as someone has earnings, a portion of a salary should be put into some form of retirement account,” Uyeki shared. “And for those who have started a policy, but their lives have changed since the last time they reviewed it, an evaluation of the coverage they currently have and the coverage they need should occur at least annually.”
Curious About Coverage?
For those interested in getting a better understanding of coverage needed and costs associated with proper coverage, Chelsea Groton Financial Services has a free Life Insurance Calculator. Visitors to the site will be able to play around with calculations, whether they know how much insurance they want or if they need help determining the right amount of coverage.
Personal financial obligations determine the amount of coverage you need, while age, tobacco use, health conditions, risky occupations or hobbies, and type of policy are a few of the top factors that impact cost.
What Next?
Ready to chat about life insurance coverage and the other financial vehicles you should be considering as you plan for retirement? Call the team of advisors at Chelsea Groton Financial Services at 860-572-4040. The team will work with you to ensure you have the appropriate amount of life insurance for your needs, and that funding and beneficiaries are properly allocated, in order to protect the financial future of those you care about most.
*2024 Insurance Barometer Study, LIMRA and Life Happens
About Chelsea Groton Financial Services
Investment and insurance products and services are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Chelsea Groton Financial Services is a trade name of Chelsea Groton Bank. Osaic Institutions and Chelsea Groton Bank are not affiliated. Products and services made available through Osaic Institutions are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.
