What’s the Deal with Life Insurance?‘
By: Max Valavanis, CFP®
Although it might sound strange, you can compare life insurance to cars. You can have expensive cars, muscle cars, and simple ol’ reliable cars. Life insurance also has many options. However, when you boil it down, different models can serve the same purpose. For vehicles, it takes you from point ‘A’ to point ‘B’. For life insurance, the goal is to give loved ones a benefit if you pass away. Where this comparison differs is that most people appear to own vehicles, but the American public can still be apprehensive about purchasing life insurance. According to LIMRA, roughly 90% of consumers agree that everyone needs a version of life insurance; however, as of 2020, only 54% of American adults own a policy.
One possible reason for this inexplicable discrepancy could be misinformation. LIMRA ran a study comparing the amount people expected to pay to obtain a life insurance policy. The results were staggering… The average American guessed the cost to be twice as much as the actual price. This disconnect pushes people further from getting the insurance they or their family may desperately need. The core act of obtaining life insurance is largely a selfless one. The idea of spending money to provide a benefit the insured will never see is a strange mindset some people may never be able to wrap their minds around. Moreover, the best time to purchase a life insurance policy is when you are healthy! This is when the costs are the lowest, and you may be able to lock in great coverage for a remarkably low price. Unfortunately, when people are healthy the last thing they think of is what may happen to their family’s finances if they pass away.
As a Certified Financial Planner™, I have witnessed firsthand families experiencing the financial difficulties that follow the death of a breadwinner or spouse. Whether it is replacing income or paying off a mortgage, life insurance tends to be a silver lining when a family member passes away. These scenarios are not exclusive to the working phase of life. When a retiree passes, their loved ones may be substantially impacted. Notably, purchasing a suitable life insurance policy can mark the difference between a financial emergency and a financially comfortable lifestyle.
When approaching this need, one of the most important steps is finding a knowledgeable advisor willing to design a plan that fits your budget and needs. Just like cars, too often someone may go home with a sports coupe when they need an SUV. Regarding life insurance, the sheer number of options available may be daunting at first. As a Certified Financial Planner™, it is my fiduciary obligation to provide a curated plan that fits your specific needs. If you have any questions about life insurance or your options, we welcome you to call our office at (321) 956-7072. We offer a complimentary appointment to every reader of the Senior Scene.
Securities offered through J.W. Cole Financial, Inc. (JWC) Member FINRA/SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). ValaVanis Financial and JWC/JWCA are unaffiliated entities.
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