Life Insurance: Let’s Separate the Facts From Fiction
Think it costs too much and is a hassle to get? You might be surprised by the reality.
![Woman in bed reaches over to tap ringing smartphone for morning wakeup call.](https://cdn.mos.cms.futurecdn.net/XdR4MPX8HS7zRrk3HTpdo3-415-80.jpg)
The past two years have spurred a heightened awareness in families who have realized that they may not be as financially prepared for the future as they had hoped. According to the LIMRA and Life Happens 2022 Life Insurance Barometer, sixty-seven percent of Americans say that the pandemic has been a wake-up call for them to reevaluate their finances, and life insurance is among the top items on their financial health checklists.
We know that there is a substantial gap in coverage for many Americans, with 106 million adults saying they need life insurance or more of it. This can be due to typical procrastination or a misunderstanding of the cost and process of purchasing a policy. September is Life Insurance Awareness Month, a perfect time to build your knowledge and separate facts from fiction when it comes to this critical financial-protection tool.
Fiction: Life insurance costs too much.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Fact: Most people overestimate the cost of life insurance.
Nearly 80% of Insurance Barometer respondents overestimate the cost of a life insurance policy. The study confirms that the likelihood of owning life insurance is higher among older generations.
Thirty-five percent of Millennials say they do not own life insurance because it is too expensive, and 45% believe they would not qualify for coverage. Yet, young, healthy adults are actually the most likely to qualify and also secure the best rates. In reality, today’s tools allow you to more easily search for and find policy coverage that fits your budget. It’s OK to start small.
And anytime you work with a financial professional, you can evaluate your coverage. Over your lifetime, you can adjust your policy choices to meet changing needs.
Fiction: It’s too much of a hassle to buy life insurance.
Fact: Purchasing a life insurance policy is now faster than ever.
Technology advances have greatly simplified many life insurance purchases. In minutes, you can get estimates of coverage amounts and basic costs. In some cases, medical exams may not be necessary.
Prudential and other companies are working to enhance digital platforms and systems to make life insurance accessible to more people, with ease. You can often acquire coverage in days, not weeks.
Of course, more complicated planning scenarios and increased health risks may lengthen the process. But in those cases, that extra time assures you have the solution that best fits your needs.
Fiction: Life insurance benefits are for others, after you die.
Fact: Life insurance can offer benefits for you while you are alive.
In addition to providing a valuable death benefit for your loved ones, many life insurance policies offer cash value that you can use during your lifetime. Certain “living benefits” can help pay for anything from medical care to other personal expenses. Talk with a financial adviser to determine what works for you.
Fiction: I don’t really need to make my family rich when I die.
Fact: Planning ahead provides protection from the unexpected.
According to the Insurance Barometer study, 1 in 10 families reported that they would have financial issues by the end of the week if the primary income earner were to die.
In many cases, life insurance is about providing financial protection for your loved ones by replacing needed income. It can give you peace of mind for many circumstances. You choose how much your family will receive. Maybe that’s enough to help maintain their standard of living after you are gone, or it is enough to pay off a mortgage or outstanding loan. What matters most is that planning for the unexpected allows your family to manage financially in your absence.
Talking about end-of-life planning is never easy, and it can be uncomfortable. We can reimagine these difficult scenarios when we see life insurance for what it really is: a smart, easy and affordable way to replace income, save on final-expense taxes, provide funds, supplement retirement and help future generations have more financial security.
It’s the ultimate way of saying to your loved ones: “I love you, and I’ve got you.”
Take action today
Now that you know some of the facts vs. the fiction of life insurance, start taking action to ensure that you and your family have the life insurance coverage you need. Doing your own research or reaching out to a financial adviser is a great next step to bringing you closer to providing more financial security for those you care about the most.
The Prudential Insurance Company of America, Newark, NJ.
1063444-00001-00
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Salene Hitchcock-Gear is president of Prudential Individual Life Insurance, a business unit of Prudential that offers competitive solutions to meet the needs of consumers through the manufacturing and distribution of a diverse portfolio of life insurance products. An insurance industry veteran with more than 30 years of experience, Hitchcock-Gear joined Prudential in 2017 as chief operating officer of Prudential Advisors, the Company’s national sales organization with more than 3,000 financial professionals, advisors and fee-based financial planners who offer clients a broad range of financial solutions. She became president of the Individual Life Insurance business in 2018.
-
Visa Is the Worst Dow Stock Wednesday. Here's Why
Visa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
By Joey Solitro Published
-
Another Analyst Moves to the Sidelines on Tesla Stock After Earnings
Tesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
By Joey Solitro Published
-
Confused by Annuities? Making Sense of the Different Types
Many investors aren't sure if annuities are a good option for meeting financial goals. Let's look at the different categories, along with their pros and cons.
By Kris Maksimovich, AIF®, CRPC®, CPFA®, CRC® Published
-
Talkin' 'Bout My Generational Wealth: Baby Boomers
With retirement, each generation has different priorities and challenges. For Baby Boomers, it's a matter of ready or not, here it comes.
By Alvina Lo Published
-
How to Avoid a Big Hassle if Your Financed Car Gets Wrecked
How an insurance check is made out for repairs can cause a world of problems if the lienholder is left out.
By H. Dennis Beaver, Esq. Published
-
Estate Planning Strategies to Consider as Election Nears
Are big changes in tax laws coming soon? Not likely, but you might want to take advantage of higher estate and gift tax exemptions well before the end of 2025.
By David Handler, J.D. Published
-
How to Get Your Money's Worth From Your Financial Adviser
A good financial adviser will focus on how your financial planning and investment strategy align with your lifestyle and aspirations.
By Pam Krueger Published
-
Think of Prenups and Postnups as Financial Planning Tools
These contracts provide a clear framework for asset management and protection and are especially useful if you get married later in life.
By Andrew Hatherley, CDFA®, CRPC® Published
-
Congratulations on Your Raise: Three Things to Do With It
We're not saying you shouldn't spend it on a new car, but there are some considerations to guard against lifestyle creep and to help ensure a comfy retirement.
By Andrew Rosen, CFP®, CEP Published
-
Check Off These Four Financial Tasks to Finish 2024 Strong
The new year is a popular time to set financial goals, but now is the ideal time to check how you're doing. Four tweaks could make a big difference.
By Daniel Razvi, Esquire Published