“Yeah, I’ve got life insurance where I work. I don’t need any more!” This is the #1 reason given to me by customers on why they don’t need to purchase life insurance. This is a real head-scratcher for me.
The trouble is, most people grossly underestimate the amount of money their family will need to survive should the unexpected happen to the household’s primary breadwinner.
Most individuals who work for companies that provide employee benefits have some amount of group term life insurance from the company. Generally, it’s either a flat dollar amount, like $25,000 or $50,000, or a multiple (one times, two times, etc.) of your salary. It’s also important to remember that the group term coverage only exists as long as you continue to work for that company. If you ever leave your job, or get sick and wind up in the hospital and are terminated from your job, then your group policy is no longer active.
In the months leading up to the September celebration of Life Insurance Awareness Month, the Life Insurance Marketing and Research Association conducted a study of how much life insurance Americans have today. The study found that a majority of Americans are underinsured and have far less coverage than what most experts recommend to ensure a secure financial future for their families.
Think about all the expenses you have on a monthly basis: mortgage or rent, food, utilities, cell phone, cable, gas for your cars, entertainment. Add them together and it can amount to a fairly significant amount of money each month.
While the $25,000-$50,000 in coverage that your group life insurance plan offers would certainly help your loved ones when you die, it’s not nearly enough to pay those monthly expenses for very long. Not surprisingly, many families in the study said they would not be able to last even one month without the breadwinner’s salary.
Buying life insurance won’t guarantee that you and your family will never face a tragic situation, but it will provide your family with financial protection so that whatever hopes and dreams you have can still be realized, even if the worst happens. Adding a term life insurance policy separate from what you may have through your employment makes good financial sense, especially if you have a family. There is no better time to update your coverage.
Do it for the ones who will be left behind.
*Shout out to Pekin Insurance Blog for the great content for this blog.