5 Things You Might Be Surprised to Learn About Insurance

How confident are you about the insurance strategies you have in place to protect against an unexpected turn in your life? Do you feel like you have a clear handle on how to manage your insurance needs effectively?

Before you answer, here are five aspects of insurance coverage that may surprise you:

1. Even a stay-at-home spouse may need life insurance.

We tend to think of insurance as something to replace income that would be lost if a person dies. But household contributions aren’t limited to take-home pay. For example, a stay-at-home spouse might fulfil a role – such as childcare and housekeeping - that would be expensive to replicate if they were no longer around. Think about the financial impact the loss of him or her would have on the overall budget and expenses of the household. An appropriate life insurance policy can help mitigate that burden at a time when mourning families have plenty of other worries and stressors on their minds.

2. Single people should be protected, too.

Assuming you have no dependents, there may be no obvious reason to have life insurance in place. But if you pass away unexpectedly, you may still leave behind some expenses, such as funeral costs. Also, if you carry debts that outstrip your assets, family members may have to assume responsibility for them. One more consideration is that life insurance may be more attainable and economical if you buy it when you’re younger and healthy.

3. You may want to insure the lives of children.

How would your life be affected if your child passed away? Would it impact your ability, at least for a time, to carry on with work and other aspects of your life? While it’s a terrible prospect to have to contemplate, it is a possibility for which you may want some financial protection. Life insurance for a young healthy, person can be very cost effective in most cases.

4. Too many people risk being underinsured, especially women.

According to a 2021 study by LIMRA and Life Happens, survey by the Life Insurance and Market Research Association, just 47% of women have life insurance coverage in place compared to 58% of men¹. In most cases today, the need for insurance coverage is generally equal regardless of gender.

5. Disability coverage may be even more important than life insurance.

Suffering a disabling injury or illness that sidelines you from work can have a dramatic impact on your income. Most people make life insurance a priority, but for those who do not, the result is bills that risk going unpaid and financial goals unmet.

According to the Social Security Administration, more than one in four Americans age 20 or older will become disabled before retirement age². The risk is greater than you think.

Reviewing your protection needs is an important part of the financial planning process. Talk to your financial advisor if you have any concerns about your own coverage.

¹https://www.limra.com/en/research/research-abstracts-public/2021/2021-insurance-barometer-study/

²https://www.ssa.gov/disabilityfacts/facts.html