Why Buy Life Insurance

By: Max Valavanis, CFP®

            Unfortunately, the American people are under-insured concerning life insurance. The facts are glaringly obvious. As per the Population Reference Bureau, roughly 2.8 million people die every year in the United States, translating to roughly 852 poor souls per 100,000 in population. Interestingly, 90% of consumers agree that everyone needs life insurance; however, as of 2020, only 54% of American adults own life insurance… Would you believe that in 1960, 75% of US adults owned individual life insurance! Why the massive decline?

           For years, misinformation regarding the life insurance industry led to this decline. For example, when it comes to the cost of life insurance, LIMRA ran a study comparing the perceived value of a policy compared to the actual price. Their results reveal that the average American guessed the cost to be twice as much as the actual price! Moreover, one of the most common excuses I hear when inquiring about life insurance is that the client is “healthy.” Without a crystal ball, no one knows what their health will be ten years from now. In these cases, it doesn’t hurt to inquire about life insurance. You can always back out of the policy before it begins!

           I have witnessed firsthand families going into turmoil after the death of a breadwinner. These scenarios are not exclusive to the employment/working phase of life. When a pensioner passes away, their loved ones may also be at risk. It usually results in complete financial ruin when the survivors are left with significantly less cash flow. This is entirely avoidable. Most of the time, purchasing a suitable life insurance policy only requires a knowledgeable advisor willing to design a plan that fits your budget and needs.

           Many married couples and singles age 55 or older will stare at stagnant cash in the bank – or lagging investments – and wonder what to do with the funds. Using unproductive money for life insurance can leverage its buying power and provide a hefty tax-free death benefit for the insured’s loved ones. With the proceeds, a nice legacy can be built and ensure their well-being for years to come!

           Most need life insurance for one or more of these three reasons: replacing lost income, paying off burdensome debts, or creating a legacy for your loved ones. It all boils down to a straightforward question, are you willing to part with some monthly cash now to benefit your family when you pass on? Of course, you love your family – or most of them. So, give me a call. I’ll interview you and see what plan best fits your scenario. You – and they – will be glad you did. 

Max ValaVanis, CFP® is a co-owner of ValaVanis Financial in downtown Melbourne and in Rockledge. Max specializes in lifetime income planning for Retirees while protecting principal.  Max can be reached at 321-956-7072.