For the second consecutive year, Genworth’s LifeJacket Study points out a significant gap between the amounts of life insurance most Americans own and what they may actually need.
The study suggests the gap tends to be substantially narrower for the college educated. Insured adults who attended or graduated college have 2.5 times the amount of life insurance coverage than adults who did not graduate high school or who only have a high school diploma. For adults with a high school diploma or less, 60% don’t have any life insurance, while only 44% of college educated adults have none. Without coverage, a single event can ultimately deny a family’s dreams of a secure financial future.
Financial literacy empowers people to make informed and responsible choices, and the LIFE Foundation encourages everyone to take personal financial responsibility through ownership of life insurance and related products in their planning.
The Genworth study stated that life insurers have worked hard to educate buyers on the importance of periodic financial checkups to ensure adequate coverage and the fact that life insurance protection is very cost efficient. For what it costs to buy about three cups of coffee a month, a person could add enough additional coverage to meet their current needs.
Young singles who may not be predisposed to buy life insurance would be wise to seriously consider locking in today’s low prices and purchase coverage now. Life insurance is as affordable as it’s ever been and prices may not be this low again. For example, a 30 year old who is in the best health rating of “preferred plus non-smoker” can buy $300,000 of 20-year level term life insurance coverage for around $15 per month.
A financial advisor can help determine whether you have a coverage gap and offer advice on how to best ensure you have adequate coverage. In addition, an excellent tool to determine how much life insurance is appropriate is the LIFE Foundation’s Life Insurance Needs Calculator.
Run the numbers for yourself, and then pick up the phone and call your agent.