Only 2 percent of Americans have enough life insurance coverage
98 percent of Americans who have a spouse, long term partner or other dependents are not adequately insured, according to a study last year. The study found out that an average American has about $300,000 in coverage but actually needs $1.5 million. The wide gap is shocking. Insufficient life insurance coverage can cause significant hardship for a family if anything happens to their main supporter.
The gap in life insurance coverage was widened because most people don’t understand the actual cost of their mortality for their loved ones. When a person passes away, some cost will be gone with him, while others remain. The family will still need to pay for mortgage, college tuition, groceries, and utilities. New costs can also present themselves, such as medical bills or funeral cost. Without the regular income source, the dependents could be seriously stranded without help.
Term life insurance is used by most people to help their family pay off debts and funeral expenses. Some might want to use term life insurance for tax planning purposes thanks to the usually tax-free proceeds. People without debts or dependents can also leave money for charity after they pass away, by specifying it in the policies.
The most important purpose of term life insurance, however, is to replace the income of the deceased person. This way, they can ensure that their family can move on without unduly hardship. Without life insurance, the loss of a loved one can also lead to the loss of a home or an education opportunity.
The current average coverage, however, can only replace just 16 percent of the lost income, which is nowhere near enough.
How to shop for the most cost-effective policy
While most people are not aware of this inadequacy, some are aware but take no action to rectify the situation. The delay is often because most assume that they cannot afford better life insurance coverage. The truth is, term life insurance typically costs less than permanent insurance. Different insurance companies also offer different policies, benefits and costs. Therefore, by shopping around and choose wisely, you will be able to find the most cost-effective policy that suit your needs.
Fortunately, online tools are available, such as BestTermLife.net, where you can search and compare many term life insurance providers at once. Instead of talking to 10 different representatives and repeat your information again and again, you can submit your information once and requests many different quotes. It’s time efficient and gives you more information to make an informed decision.
While talking, or even thinking, about your own mortality can be uncomfortable, it is an unavoidable matter. So instead of delaying, take action today to make sure your loved ones are always protected. Do your research to select a life insurance policy that offers adequate coverage at the best cost with BestTermLife.net.
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