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LIFE INSURANCE: It's never a bad time to review your life insurance coverage

Services for Real Estate Pros with Liberty Mutual Insurance

Did you know? According to LIMRA International:

Many individuals in the U.S. are uninsured1

  • More than 1 in 4 men have no life insurance coverage at all.
  • Overall, women are more likely to own life insurance today than they were in 1998, but almost 1 in 3 women have no life insurance coverage at all.

Many U.S. families are not prepared for premature death2

  • Twenty-six percent of families can cover expenses for only a few months if a primary wage earner dies.
  • Twenty-eight percent of wives and 15 percent of husbands have no life insurance at all.
  • Ten percent of families with children under 18 (3.6 million households) have no life insurance protection.

Many U.S. couples are underinsured2

  • The average amount of life insurance coverage on insured husbands is $235,600 and insured wives average $147,800 of life insurance.
  • Insured husbands in the U.S. carry enough life insurance to replace their income for 4.2 years, and wives for 4.9 years. The typical married couple would need to double its current coverage to meet the expert recommendation of having enough life insurance to replace income for 7-10 years.
  • Fifty-six percent of married parents believe their current life insurance coverage is inadequate.

LIFE INSURANCE: It's never a bad time to review your life insurance coverage

By David Vera, Licensed Insurance Agent, Liberty Mutual Insurance

If you died today, would your family be prepared for the resulting financial loss? Many U.S. families are not - in fact, according to LIMRA International's 2008 "Facts About Life" article, one third of adults in the United States carry no life insurance at all.

 Even if you do have some sort of life insurance policy that protects your loved ones against financial loss in the event of your death, it's important to periodically re-evaluate whether you have enough insurance and the right kind. 

 The first step in answering that question is to determine whether your financial landscape has changed since you last bought life insurance.  Have you bought a home?  Increased your income?  Had a child?  Gotten married or divorced?

 If you answered ‘yes' to any of these questions, it's time to review your coverage with a life insurance expert. Most financial professionals agree that a review of your life insurance coverage at least once each year is a good idea.

 Here are some of the most common needs your life insurance should cover:

Mortgage or rent payment fund:  If you want your family to remain in their home, your life insurance policy should provide enough to either pay off the mortgage or cover the rent payments for an extended period of time.

Income replacement:  Who will pay the bills if a breadwinner dies prematurely?  Many experts say that you should consider life insurance coverage worth five years of current income.

Final expenses:  In its most recent estimate, the National Funeral Directors Association places the average funeral cost at $6,500.

Outstanding debt:  This category includes credit card debt, and education and auto loans you would not want your family to be responsible for after your death.

Education fund:  A life insurance policy can provide funds for a college education or comparable vocational training.  Based on 2007-08 College Board estimates, the average cost of a four-year private education is nearly $130,000, and the average cost of a four-year public education is over $54,000.

Take the time to review your existing life insurance policy, or start to look at coverage if you haven't already. Consulting a licensed life insurance agent is one of the best ways to determine what life insurance best fits your needs.

David Vera is an Agent with Liberty Mutual Group in The Woodlands, TX.  Liberty Mutual is the nation's fifth-largest provider of personal lines of insurance in the U.S.  The company offers full lines of coverage for home, auto and life.  Call (281)364-1090, Ext 59236 for a no-obligation quote or visit me at www.LibertyMutual.com/lm/davidvera. Life insurance and annuity products are offered by Liberty Life Assurance Company of Boston, a member of the Liberty Mutual Group.

 1 LIMRA International: Generations at Risk, Facts About Life 2008

 2 LIMRA International:  American Families at Risk, Facts About Life 2007

Comments (1)

Mike Wong
Keller Williams Realty Southwest - Sugar Land, TX
Realtor: Commercial, Residential, Leasing, Invest

Great reminder and article David. This is something I need to review myself and pass along to my clients. Thanks for sharing.

Sep 08, 2008 09:45 AM