Life Insurance Awareness Month
September is observed as the Life Insurance Awareness Month (LIAM) across the country. It serves as an annual reminder to Americans about their life insurance needs, to make them understand the importance of including life insurance in their financial plan and if they already have insurance, to revisit their policy and make sure they have the best possible coverage.
However, there is little to celebrate this year as far as life insurance is concerned. According to the 2010 Life Insurance Ownership Study conducted by the Life Insurance and Market Research Association or LIMRA as its more popularly known:As many as 30 percent (35 million) U.S. households have no life insurance protection at all.Only 44 percent (58 million) U.S. households have individual life insurance policy, the lowest number in 50 years.About 11 million households with children less than 18 years of age have no life insurance coverage.The figures portray a grim picture of Americas life insurance status and thats not going to change unless there is a concentrated effort through campaigns like LIAM to spread awareness about the necessity of having life insurance protection.
In its seventh year now, LIAM has taken up the challenge of educating the American public about their need for coverage. The initiative is sponsored by a non-profit organization called LIFE in association with over 100 top insurance companies and industry groups in the country.
However, this year marks a deviation from the previous ones as the challenges facing the life insurance industry are much greater. An uncertain job market, failing real estate sector, and an overall depressed economy have put a huge financial strain on an average American family. People already struggling to pay their daily bills have little left over resources to buy life insurance.
According to the LIMRA study, one in four U.S. households depend solely on group life insurance for coverage, which means they will have no coverage if they lose their jobs or quit.
While the reasons for not purchasing life insurance are legitimate, what people fail to see is not having coverage leaves their family just one accident or illness away from a financial catastrophe. If the primary breadwinner was to pass away at this stage, itll be nothing short of a financial disaster for his or her family.
Aside from the emotional trauma they will go through, the family will lose its only source of income, might have to suffer the ignominy of losing the family home, may not have sufficient funds for the kids to go to college, and could even struggle to pay for the funeral and other final expenses.
As morbid as that sounds, its not far removed from reality for many American families. The study conducted by LIMRA, in fact, reported that four out of 10 households with kids aged 18 years or less admit that they would immediately have trouble taking care of everyday living expenses if the primary breadwinner was to die unexpectedly.
However, there are many reasons other than a poor economy that keeps Americans from making this critical purchase and top amongst these are.
Procrastination: For so many people who can well afford and want life insurance, its nothing but inertia and procrastination that keeps them from buying a policy. Getting life insurance remains a to-do item in their list that keeps waiting to be ticked off. Weeks turn into months and months into years, but tomorrow never comes. What they forget is there is no guarantee there will be a tomorrow for them at all and the sooner they secure the financial wellbeing of their family, the more peaceful their today will be.
Low Priority: Many Americans prioritize paying off their debts and putting money aside for retirement over getting life insurance. Even though recession has changed the spending habits of Americans and people are saving more to safeguard their future, life insurance does not necessarily figure in their financial goals.
Lack of Awareness: Some people are just not aware of the impact life insurance coverage can have on their lives if the main wage earner of their family was to die prematurely. Thats where initiatives like LIAM are so important in educating people about what life insurance can do for them, how it can secure their financial stability by ensuring debts and mortgages are paid off, there is a regular stream of income coming into the household, and there are sufficient funds to support kids education.
Complexity of Products: There are so many life insurance products in the market and sometimes having too much choice can be counter-productive. Besides, life insurance is anything but an easy concept to grasp. More often than not, people need professional help to understand the different life insurance products and what they mean and can get easily overwhelmed by their complexity.
Procedural Hassles: Last but not the least is the fear of going through a long drawn procedure that can take anywhere between three to eight weeks or more. There are forms to fill, health exams to take, documents to furnish, etc. all of which make the process less than fun for consumers.
But in the end, we must realize life insurance is not for us, but for the ones we leave behind. Lets all take a pledge this Life insurance Awareness Month that we will overcome all obstacles in making sure they are taken care of even when we are not around!
by: Denise Mancini