By Dan Anderegg
Life Happens is a not for profit organization formed over 20 years ago to help educate the public on life insurance. One of their most successful campaigns is Life Insurance Awareness Month. Life insurance, in general, is one of the most important and often times misunderstood decisions you can make to protect your family. Below are three answers to common misconceptions about life insurance.
1. How much life insurance do I need? Recent studies show that less than half of middle class families own life insurance according to LIMRA Facts of Life. Many of the families that do own life insurance don’t own enough. One “rule-of-thumb” to help you understand how much life insurance you need is, 14 times your annual income. As with any “rule-of-thumb,” your individual circumstances could cause this to go up or down. You may need 20 times your income if you have young children and a lot of debt. Or the number could be less if your children are grown and your mortgage is paid off. Check out the financial calculator at http://www.lifehappens.org to help find out how much coverage you need.
2. How much does it cost? Thinking that life insurance is more expensive than it really is can be another obstacle in committing to buying life insurance. In one survey (LIMRA Facts of Life), most participants thought life insurance cost twice as much as it actually does. A healthy 35-year-old male can buy almost $400,000 of a 20 year term life policy for $30 a month.
3. What is the agent’s role? Many people today don’t want to be “sold” any products much less life insurance. An agent’s job is to help you find the right amount and type of insurance for your budget and family needs. Working with a trained agent can benefit you by finding the right type of insurance that fits your situation. For example, if you have health issues, an agent can find the right company for you. Keep in mind; the healthier you are the less you will pay for insurance.
Nobody wants to think about why life insurance is necessary, but in all reality we need to. Preparing and providing for our families is just one way to continue caring for them long after we are gone. For more information on Life insurance and Annuities, contact a Western Fraternal Life agent in your area.