Using a LIMRA study of a few years ago, at that point there were tens of millions of Americans that would fit into a category of “needing” life insurance, but didn’t have any. I know I’ve been down this road before, but is there really a case to be made by those millions of people, a good case, for not having life insurance protection for their families?
Just a few facts from that 2008 study kind of paint the picture.
Many U.S. families are not prepared for an untimely death
* Fifteen percent of husbands and 28 percent of wives have no life insurance.
* 6 million households (ten percent of families with children under 18) have no life insurance.
* The percentage of families with dependent children that admit they’ll have immediate trouble with everyday living expenses is 22 percent. Another 26 percent say that if a primary wage earner dies they’ll only be able to cover expenses for a few months.
So, 48% of families are either uninsured or grossly under insured if they are going to be in immediate or imminent financial trouble if the primary wage earner died. That’s half of the families with dependent children! That is just crazy. Oops. Kind of tipped my hand on where I stand on this question.
While the LIMRA study didn’t break it out by the age of those that were uninsured or under insured, I would venture a guess that most are in their 20’s or 30’s, those years of immortality when the idea of budgeting $20-$30 a month, every single month, for life insurance is like, well, it’s like acting just a little too grown up. What if they need that money to go out to dinner, or buy beer for the super bowl?
Maybe that’s a bit harsh. Truth is that in too many cases money is just tight for young families with children. But if that’s the case and that’s really the only reason you’re not doing the right thing, ask your parents for help. My children have life insurance because I pay for it. As a parent and grandparent, if you really think it through, there is a lot to be said for carrying a term insurance policy during that period when your children have dependent children.
There has been plenty made about how medical bills can bankrupt a family. How about when those medical bills end in the death of a family bread winner? With life insurance bankruptcy is taken out of the picture, as is the stress of the financial meltdown that can occur upon that death.
Bottom line. For me it comes down to this. If you’re old enough to have kids or old enough to be married; if you are old enough to have responsibilities that would impact someone else upon your death, you should have life insurance. No excuses. If you can’t afford it, get your parents or grandparents to help you. If you’re just blowing it off, get a friend to slap you in the face and wake you up. It’s time. Not later. Now!
My 20 years of experience give me the knowledge and leverage to find reasonably-priced life insurance for people who have been declined or are paying more than they need to.
The suggestion of receiving help at the hands of parents and grandparents pleases me. I wonder if the idea might be taken a step further, so that one’s extended family becomes his or her life insurance plan (rather than a source of subsidy for a purchased life insurance policy). To wit, in the unlikely (but potentially devastating) event that a spouse or parent dies, his extended family is already prepared to take upon itself the onus of satisfying the needs of his/her survivors.
I do not mean to neglect the difficulties such a plan would entail (such as possibly relocating aforementioned survivors), but I wonder if it mightn’t be more practicable than purchased life insurance for some individuals (particularly those with impaired insurability).
That’s certainly an option. Not one I think I would use. I’m not sure if you’ve had kids move home before, but it can certainly interrupt your golden years and the truth is that I’m not sure the kids like it much more than the parents.
Far more practical, at least for my taste, to help them with the cost of life insurance and if the unfortunate happens, let them retain their independence and get on with life. No difficulties! No onus! Just life insurance doing what it is intended to do.