Financial illiteracy is a real concern for many people. Often, most young adults who have to tackle their finances struggle with the right investment plans and are mostly underinsured/uninsured because of being largely unaware.

This is what inspired the coming of Life Insurance Awareness Month into the picture. This movement has been running its course for 20 years now. Every September, the industry observes Life Insurance Awareness Month to help Americans understand the significance of life insurance and its related nuances.

According to a study, only 50% of Americans had life insurance in 2022. Approximately 60% of residents also stated that they are aware that life insurance is required for them, but the premium amount is out of their budget. Because of their lack of knowledge, some people are unsure of which insurance policy to purchase and invest in.

Keeping in line with Life Insurance Awareness Month, we believe it’s prudent and critical to highlight some important aspects of life insurance and how to get the best options for yourself through assessment and portfolio building.

Why Is Life Insurance Even Important?

To Secure Your Loved Ones

If the family’s sole breadwinner dies, 44% of Americans will experience financial stress within six months of losing the individual. This clearly reflects how important it is to consider the lives of people you will leave behind and their well-being.

To Pay for Funerals

A burial in America costs around $7,800, which includes costs of the burial casket, service fee, transfer of remains, van, and so on. Because not everyone can afford to pay such a large sum, the government provides a service in which funeral homes handle the disposal of the body. 

But our loved ones would never abandon us in such a way, which is where life insurance comes in. With the right policy, the family can benefit from the immediate release of funds to pay for funerals.

To Pay for Debt, Mortgage, or Loans

Untimely death can often result not only in a home with no wages but also in a home that must now pay the debt without a steady income flow. These situations are scary when a family is left to fend for itself without a breadwinner. Life insurance policies can assist the family in repaying such sums.

To Fund Education or Retirement Homes

Around 2.3% of America’s elderly population lives in retirement homes, and many are in assisted living facilities for better care. These liabilities can be covered by the right life insurance policy. It can also help the younger generation (who are beneficiaries) continue their education in the event of an untimely death of the policyholder without worrying about tuition fees.

The Recent Upheaval Calls for Concrete Measures

America is facing a global climate crisis that could be fatal to its citizens. Wildfires, hurricanes, floods, or any man-made disaster, such as mass shootings or vandalism, can occur at any time. Climate change is also causing people to live shorter lives, as many studies have shown.

Increased mental anguish has also been a source of concern for many Americans. According to one study, suicide was the 11th leading cause of death in the United States. Elsewhere, COVID-19 was the cause of death for approximately 1,175,000 people, leaving a huge void and a period of turmoil in the community. Such reasons have necessitated immediate action, and thus, life insurance has become increasingly important in leading a peaceful life. 

How To Choose the Right Policy?

Americans frequently struggle to find the right policy, and even after purchasing a policy, many complain of being underinsured. It is critical that we not only purchase a life insurance policy but also select the appropriate one by understanding the terms and conditions in a wider and clear ambit. Here are some key points to consider when selecting a policy based on your needs and current situation.

Understand Your Present Condition

One of the most important factors in determining the best life insurance policy for yourself is your current health. Your premiums are determined based on information such as your age, health conditions, gender, smoking habits, driving history, and so on. The younger you are and the better your health, the lower the premiums you will have to pay for better coverage. Thus, it is always advisable to invest in a good life insurance policy at a young age.

Evaluate the Needs of Your Family

Make sure you understand how many people in your family will require special care after your death. This could be your daughter, who will be starting college in a few years, an ailing parent who will require special elderly care, or your partner, who will have to step up to support the family if they are not working. You should base the valuation and coverage of your policy on these evaluations.

Get a Policy That Is Tailored to Your Requirements

Last but not least, always invest in a customized policy rather than a pre-packaged one. Remember that there is no such thing as a one-size-fits-all life insurance policy. Thus, always seek advice from a reputable source who can assist you in understanding your long-term plans and the needs of your family. It is critical to understand that your policy must cover all required aspects without the risk of being underinsured.

Gonzalez Insurance provides proper valuation and risk assessment based on your portfolio and current dynamics. Contact us to learn more about life insurance policies, how to choose one, and their importance for timely retirement planning.