(StatePoint) If we’ve learned anything from 2020, it’s that life can be unpredictable. Having sufficient life insurance can provide financial stability and security to loved ones during times of uncertainty.
Forty-one million Americans say they need life insurance but don’t have it, according to LIMRA’s 2020 Insurance Barometer Study. Others are insured but don’t have enough coverage. If this describes you, your spouse or children could find themselves in a financial lurch, expected to pay off debts, loans and final expenses when you die, especially if you’re the main source of income.
“Having insurance isn’t just about financial protection,” says Louis Colaizzo, senior vice president of Erie Family Life. “It also helps maintain some sense of normalcy for family members. Kids can continue their extracurricular activities, partners can maintain their lifestyle and families can stay in the home they know and love.”
So, how do you know if you have enough? During February, which is “Insure Your Love Month,” an annual reminder to financially protect loved ones, here are six questions from Erie Insurance experts to help you find out.
1. Do you have enough to cover final expenses? Make sure you can accommodate funeral or burial expenses, end-of-life costs or unpaid medical bills. Otherwise, your family may be responsible for paying these. According to the National Funeral Directors Association, the national median cost of a funeral with viewing and burial for 2019 was $7,640 – a steep sum many can’t pay out of pocket without notice.
2. Will your family receive enough to cover income loss or debt? If you’re your household’s primary earner, you’ll want to ensure you have enough money to maintain your family’s lifestyle. For example, can your policy help pay off a mortgage or multiple car loans in full or cover expenses like groceries? If not, your spouse or dependents might find themselves struggling, putting them at risk for foreclosure or other financial hardships.
3. Do you have dependents? A dependent is someone who relies on your income to make ends meet. According to the U.S. Department of Agriculture, the average cost of raising a child through age 17 is $233,610, not including the cost of a college education. That’s a big strain.
4. What kind of retirement do you want? How do you guarantee you’ll have enough for the future and won’t need a second career late in life to cover living expenses? One way is to tap into the cash value of a permanent life insurance plan and use it as supplemental income during retirement.
5. Do you have unique lifestyle considerations? Do you own a business or want to leave a legacy when you’re gone? Having an insurance plan will protect these assets and give you peace of mind that your money goes exactly where you want it.
6. What if your circumstances change (again)? Some life insurance companies, including Erie Family Life, offer a Guaranteed Insurability Option rider to help with the quickly changing times, making it possible for you to purchase additional insurance later, even if circumstances deem you “uninsurable.” This means the death benefit can be increased as your needs change but you won’t have to answer medical underwriting questions -- a relief for many.
According to experts, one of the easiest ways to protect loved ones and their financial futures is to prepare for the unexpected.
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