“Failing to plan is a plan to fail” – Eric Bouskila, Principal
by Jared Deyong, M.B.A, ARI Financial’s Advanced Planning Director
If there is one thing I’ve learned through the pandemic, it’s that life is delicate and it’s important to prepare for the unexpected. For the last 18 years, the entire month of September has been designated as Life Insurance Awareness Month (LIAM). The reason we set aside an entire month for advocacy and awareness is that so few individuals have enough of it.
There are currently over 100 million American living with a substantial life insurance gap, with over 42% of households that would face a financial hardship within six months should the wage earner dies unexpectedly, according to LIMRA (Life Insurance Marketing and Research Association). Life insurance is a central part of a financial plan, regardless of age, income, or life stage. Whether you’re just starting out in your career or planning for retirement, life insurance can be a compelling and effective tool to help you better protect your family’s financial future or fund your retirement.
Some broadly held misconceptions about life insurance are that it’s too expensive, too difficult to buy or that their workplace life insurance is enough. To the average consumer, life insurance can seem incredibly intricate. With all our acronyms (WL, IUL, GUL, etc.) and the variation across product types, it’s no wonder consumers need help demystifying the world of life insurance. It’s up to us to educate consumers and advocate for life insurance coverage beyond what they might receive as a part of their employee benefits package.
Many carriers provide a variety of life insurance options that are cost-friendly and can be done swiftly and completed non-abrasively with the use of simplified underwriting and technology. A question I often receive from individuals is “how much does my family and I need?” Well, there is no precise or exact formula to tell you how much insurance coverage you need, however, it is usually recommended that you purchase between 5 and 10 times your gross annual income. There are also no restrictions on the number of beneficiaries you can name, or how you choose to allocate your assets amongst them. It is also recommended you name a second beneficiary, also known as a contingent beneficiary, in case something were to happen to your primary. It is also vitally important to keep your policy information safe and accessible while keeping your beneficiary fully informed.
While the pandemic and COVID-19 have presented their own unique challenges for so many, it has also served as a significant reminder that life is short and there’s no time like the present. If purchasing a life insurance policy has been on your mind, yet you’ve been hesitant, there’s no better time than during Life Insurance Awareness Month (and, especially before the holidays) for utilizing all the benefits available to you and those you care for most.