What is the most important question your insurance agent should ask?
Answer: “Do you have life insurance?” or at least: “Do you need life insurance?”
Here’s a common response I get when I ask someone if they have life insurance: “I have life insurance at my job, so I don’t need an additional policy.”
According to the American Council of Life Insurers Facts Book, 44% of all life insurance policies in force in 2015 were through groups, including workplaces and associations.
Typical coverage amount ranges from $10,000 to $50,000 or some multiple of an employee’s annual salary. The coverage is usually inexpensive, if not free. Plus qualification is generally guaranteed.
So why would someone need to purchase an individual life insurance policy if they already have coverage from work?
I can give you a couple of reasons.
Most people are unlikely to stay with the same employer for their entire career.
The days of getting a gold watch after a 30-year stint with a company is an exception to the rule.The average length of employment with the same company is 4.6 years, according to the Bureau of Labor Statistics.
The life insurance benefits of one company are not guaranteed to be the same as the next. Also, there are often limits to the amount of life insurance available for purchase by an employee.
When you “own” your life insurance policy, it doesn’t matter who your employer is.
Too much focus is put on figuring out how much life insurance a person needs. The question of how much life insurance is needed is really just a math problem.
The underlying issue that is missed most often is the question of why anyone needs it.
Why do you need life insurance at all?
Many would say the money can be used to pay off debts like a mortgage or the final expenses of a funeral.
The far more compelling reason is the desire to protect the people you love. Life insurance addresses a very basic human emotion. If you have anyone that counts on your income to help meet their needs, that is WHY you need life insurance.
Your “why” will likely be a loved one.
WHY LIFE INSURANCE?
Once you come to the realization that you care about the well-being of someone beyond your living years, then the question of how much life insurance you need can be answered honestly and accurately.
I can save you the suspense on the future. We all die in the end.
We will all leave something behind, but what we leave behind is less important than why we left it.
The discussion of life insurance can easily get bogged down in arguments about the benefits of term life insurance versus a cash value policy.
Regarding the cost of any insurance, we have been conditioned to make the price the primary consideration in the purchase. These are important considerations, but I have seen them paralyze people with inaction.
Don’t over complicate the purchase of life insurance. Get it through your employer or buy an individual policy, preferably some of both.
But start by focusing on why you need life insurance and this will lead you to a clearer determination of how much and what type of life insurance will work best for you.
Learn more about getting started with life insurance here or call our office, 405-340-0606.
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The information contained in this page is provided for general informational purposes only. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.