Most Americans recognize the importance of life insurance: The Insurance Barometer Study shows interest in life insurance is at an all-time high in 2023 and that 40% of consumers intend to purchase life insurance coverage within the next year. In these times as we emerge from the COVID-19 pandemic, Alison Salka, Ph.D., head of LIMRA research (Life Insurance Marketing and Research Association) said, “Younger generations experienced a life-altering event just as they were starting their careers, getting married and having children. The realization of how precarious life can be may have made them more aware of the need to protect their loved ones.”
Even though plenty of people understand the value of life insurance, there’s still a big gap between how many need coverage and how many have it. That’s why Life Insurance Awareness Month exists. In September, Life Insurance Awareness Month aims to educate people about life insurance and help them make the right coverage choices.
Want to get a head start on your education? Here are a few things to know about Life Insurance Awareness Month and your coverage options.
1. National Life Insurance Awareness Month is nearly 20 years old, but life insurance goes back much further than that.
Created in 2004 by industry education group Life Happens, Life Insurance Awareness Month is an annual campaign designed to educate Americans about the importance of life insurance and how it can help provide financial security for their families.
While Life Insurance Awareness Month has been running for more than 19 years, life insurance has existed much longer. In fact, the first life insurance company in the United States began in 1759 to support women in the church whose minister husbands had died.
Almost 265 years later, the industry continues to evolve to keep up with the needs of modern families. It’s now possible to price, shop, and even buy life insurance coverage online. And for people who have put off buying life insurance because of the medical exam, the number of no-exam life insurance options available continues growing.
2. Life insurance isn’t as costly as you might think.
The LIMRA study reports that more than half of Americans, especially younger people, overestimate the cost of insurance by as much as threefold. The misperception that life insurance is too expensive can put families at risk of financial hardship should a wage earner die unexpectedly.
The LIMRA survey also found that younger people think that they don’t need to buy life insurance until they are older and believe they can put it off. The fact is that life insurance is less expensive for those who are young and healthy. Buying a policy when they are young can help protect a young person’s financial future and the financial security of those who depend on their income.
3. Anytime is a good time to get covered.
Life Insurance Awareness Month happens in September, but the right time to buy life insurance is now, according to the Life Happens’ 2020 campaign.
Like home or car insurance, life insurance requires planning—once you need it, it’s too late. Even before the pandemic began, one in three families reported they would have financial issues within a month if the primary wage earner died. Yet nearly half (46%) of people are uninsured, per the LIMRA study, and even among those with life insurance, many say they don’t have enough coverage.
Life insurance can’t wait, and there’s no time like the present to buy.
4. Calculating your life insurance needs is a good place to start.
Life insurance has no strings attached, so your family can use it to cover day-to-day expenses, pay off debts, save for college, and more. Deciding how much you need is an excellent first step if you’re considering getting covered.
Every family’s needs are different, so think about how much yours would need to stay financially secure if you died. A few questions to consider:
- How much debt do I have?
- How much do I have in savings?
- Who do I want to protect?
- How long would they need financial support?
5. If you’re already covered, take the time to do an annual checkup.
About 43% of policyholders in the LIMRA study say they either don’t have enough life insurance coverage or don’t know. As your life changes, you should make sure that your life insurance policy changes with it if needed by doing a life insurance review.
Check your beneficiaries regularly to prepare them to receive the payout. For example, if you get divorced and remarried, forgetting to update your plan can mean your ex-spouse receives the payout. If you have term life insurance, keep track of when your coverage ends to avoid gaps. Have you experienced any significant life changes since you bought your policy? Life changes like getting married, changing jobs, buying a house, or having children, might inspire you to consider changing your policy.
Finally, ensure that your loved ones know where to find your life insurance policy and what they need to do to collect their death benefit. And if you find yourself taking care of the financial affairs of a loved one who passed away, you have several options for finding the life insurance policy of a deceased person.
Life Insurance Awareness Month happens once a year, but the need for financial security never stops. Getting the facts about life insurance can help you rest easier knowing that your family is protected when they need it most.