September marks Life Insurance Awareness Month, serving as a timely invitation to reassess our financial plans. Life insurance often carries emotional and practical concerns. By focusing on proactive planning, we can view it as a crucial element of long-term financial wellness, rather than just a reaction to potential tragedies.
Wealth Protection
Life insurance serves as a safeguard to replace lost income and cover necessary expenses. According to LIMRA, 44% of U.S. households would face financial difficulty within six months following the loss of their primary income earner, and 25% would struggle financially within a month.
Estate Planning
Proceeds from life insurance can help heirs cover estate taxes and other expenses without the need to sell valuable assets. This preserves the family’s financial legacy while ensuring that asset distribution aligns with the policyholder's intentions.
Debt Management
Life insurance policies can be customized to clear outstanding debts such as mortgages, credit card debt, and personal loans. This prevents families from facing overwhelming financial burdens in the absence of their primary earner.
Long-Term Security
Certain life insurance policies accrue cash value over time, which can be accessed for emergencies, college tuition, or even to supplement retirement income. This versatility enhances the policy's role in comprehensive financial planning.
Coverage Guidance
Experts often recommend having life insurance coverage that is equal to eight to 10 times one’s income. However, it's essential to tailor coverage to suit individual needs and life circumstances, ensuring it effectively shores up backstops where they're most needed.
Coverage Review Prompt
A life insurance checkup is astute, particularly after significant life changes. Alarmingly, 42% of U.S. adults acknowledge they require more life insurance or currently have none. Reviewing coverage ensures that policies continue to meet evolving family needs.
Reviewing your life insurance coverage isn't just a strategic decision—it’s a compassionate act for your family’s future. Take this opportunity during Life Insurance Awareness Month to evaluate current coverage or talk to a professional advisor today.