Life Insurance & Income Protection 

Most Americans don’t have enough life insurance coverage. Many don’t have any at all. Competing financial priorities, misconceptions about the costs and not understanding how life insurance works are all contributing factors. Educating your clients on the basic of life insurance is crucial to help them get the coverage they need.


 The numbers are shocking:

  • The estimated unmet life insurance need in the united states is $ 15.3 trillion

  • 70% of U.S household with children under 18 would have trouble meeting everyday living expenses within a few months if a primary wage earner were to die today

  • 4 in 10 households with children under 18 say they would immediately have trouble meeting everyday living expenses


 Many Americans overestimate the cost of life insurance:

  • 83% of consumers say they don’t purchase more life insurance because it’s too expensive, but consumers believe life insurance cost nearly 3 times the actual price

  • Most Americans believe a 20-year, $250,00 level term life policy for a healthy 30-year-old costs $400 annually

  • It would actually cost $150


 Many don’t understand life insurance

  • 70% of Americans failed a 10-questions basic life insurance test


Some points to consider when discussing life insurance with your clients


Do it for your family and home


Protecting the home and family are often the key drivers behind a life insurance purchase. It provides financial protection for surviving loved ones. This could mean making sure there’s enough coverage to cover household needs or pay off the mortgage. If the deceased parent’s income was also the funding source for college savings, replacing this should be considered, as well.


Even a parent who’s not the family breadwinner should consider life insurance. Replacing thr care a stay-at-home parent provides can be expensive, and life insurance can be a source of these funds if the unexpected happens.


Your work coverage is likely insufficient


Group life insurance that’s offered through and employer is a convenient way to get important coverage. For many, it’s the first step in protecting loved ones from the unexpected. However, employees don’t always have the ability to select the level of coverage with a group policy. If there is a coverage gap, then you may need to suggest supplementing their group insurance with a private plan.


A common rule of thumb is that life insurance should provide seven to ten times the insureds persons annual salary. That’s just a starting point. Help your clients look at a variety of factors, including income, assets, liabilities and plans for the future, such as for having additional children, or for retirement.


Coverage isn’t as expensive as you think


Overcoming this objection may be as simple as determining the needed coverage and running an illustration. In fact, premiums for life insurance are typically lower than other forms of insurance and are often less expensive than monthly bills for cable or cell phone.


Life insurance only seems complicated


Like just about any finical product, life insurance comes with some jargon. Explaining the types of insurance and how they work may help make your clients decision easier:

  • With term insurance, you are covered for a set amount of time. After your term ends, you are no longer covered.

  • Permanent life insurance is meant to cover your entire life. As long as you continue to pay the required premiums, you have coverage.


If you wait, it will cost you


Remind your clients that while it’s easy to put off buying life insurance, the longer they wait, the more they’ll spend. The older they are, the more expensive the premiums. And it is unlikely that a person would be healthier at age 40, 50 or 60 than they were at age 30.

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* Michael E. Hipson offers products and services using the following business names: Hipson Benefits – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with Hipson Benefits.

Products and services are limited to residents of states where the representative is registered. This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your representative. Read it carefully before you invest or send money. A representative will contact you to provide requested information. Representatives of AIC and AAS do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.