The month of September is national insurance month. With the unfortunate toll that the pandemic has had, the need for insurance has significantly risen.
While many forms have seen an increase, the largest was seen in life insurance. Insurance as a whole can be quite tricky to understand. With how important it has become in recent years, it's key to have a simple starting point. So to give you that 'simple' starting point we've gathered 5 important facts about insurance.
1) Not Having Life Insurance
In 2022 Limra conducted a study on how many Americans had life insurance. They found that around 54% had some form of coverage. However, over the past decade, there has been a steady decline in new insurance holders. Due to COVID, "2020 saw an industry-wide gain of at least 2% in the 1st half of the year."
2) Why are so Many Uninsured
Many factors go into why an individual may not have life insurance. Such as cost, age, health, and general knowledge. Amongst the listed causes general knowledge was found to be the most common reason people didn't buy life insurance. "Just 31% of Americans say they are very or truly knowledgeable about life insurance…"
3) People who Own Feel Financially Secure
"60% who own life insurance say they feel secured compared to the 47% of those uninsured." This is most likely because life insurance is often thought to be much more expensive. While general insurance rates are increasing, there is a major generational gap. The gap is seen best in millennials, who have some of the highest student loan debts ever seen. This, paired with a failure of proper wage increases results in the generation not buying essentials to save.
4) Purchasing at the Right Time
Four out of ten people say they wish they bought life insurance sooner. 50% of people overestimate the cost of insurance in general. Millennials in particular overestimate the cost by 213% period, of course, some variables can decently impact insurance costs. However, buying later tends to result in higher premiums. It was found that "The average premiums for a male rises 258% between the ages 25 and age 50".
5) Insurance is Only for Death
One of the most common reasons for people to consider life insurance is for after death, it's highly recommended to buy younger. The top reason consumers buy life insurance is for burial expenses (83%), to replace lost wages (68%), or to transfer wealth (63%). This thought process often leads to people not buying enough. Buying too late can result in financial hardship, especially after the primary weight earner passes.
Overall insurance is not a simple process. There are many myths about it as well as an unaddressed truth. Luckily, insurance is not only less expensive than one may think, but also customizable. Some plans can cover almost anyone. The best way to find out what to do is to seek life insurance from well-known providers. Many companies offer online or phone application processes. So even if you don't feel like you need or understand life insurance; it's better to do your research.