I received this question during the holidays and it really made me think how under insured we really are with life insurance in the United States. Of all of the different types of insurance products on the market today, life insurance for the value is the most affordable. What other insurance product could a healthy young lady age 25 buy for $12.62 per month for $500,000 of term life insurance coverage? It is quite literally pennies on dollar for most Americans. So, how much life insurance does the average person have? Let’s look at it this way.

The authority for the life insurance industry is Life Insurance Marketing and Research Association or LIMRA. According to LIMRA’s research over 30% of US households do not have life insurance. A staggering 55% of US households or 58 million people admit they do not have enough life insurance and need more.  Not only are average US families not buying enough life insurance but those households that do have life insurance have had their face amounts decrease over $30,000 average since 2004. The most alarming number comes from a survey stating that 70% of US households admit they would have serious financial problems if the primary wage earner were to die within just a few months including 30% of households admitting their problem would be immediate. According to LIMRA, the answer would be not enough.

However to answer the question, the average person has roughly $165,000 face amount of life insurance in force in the US. This number has been decreasing in the past few years even though premiums have steadily decreased as well due to extended mortality rates. So, my question is if premiums are going down and we are all guaranteed to die one day, why are Americans buying less life insurance? There are theories from lack of education, low priorities, a self centered society, a high divorce rate and low marriage rate, just take your pick. I can’t seem to find just one answer to this dilemma. It is very sad, that something this important and affordable gets overlooked. Yet I see people camping out on the sidewalk to get the newest technology toy. We made health insurance the law of the land and yet millions are ignoring it, I don’t think forcing people to be responsible is the answer either.

Maybe it just boils down to us life insurance agents and brokers to be more aggressive educating folks on why they need life insurance. Life insurance mends family finances in case of an untimely death. Life insurance is the most affordable solution to help loved ones through a difficult time. The proceeds from life insurance pay costly bills and allow family members time to grieve and heal. It keeps the lights on and food on the table during a hiatus from work for grieving and healing. It allows children to attend college and fulfill their dreams. It pays for repairs when things break and you are no longer there to repair them. Life insurance keeps them in the family home where all of the memories are and doesn’t force them to immediately move due to finances. Without you being there income is cut in half if not more. You took a wedding vow that you promised to take care of each other forever, life insurance allows you to honor your vow after death.

Let’s get the word out and reverse this downward trend before more families are made to suffer.

“You cannot escape the responsibility of tomorrow by evading it today”.—Abraham Lincoln

Image by noomhh at www.freedigitalphotos.net

yourfriend4life.com

Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 27 years of experience in sales and marketing in the insurance and beverage industries.