Are You Concerned You Can’t Afford Life Insurance?

Many people avoid purchasing life insurance, especially later in life, because they think it will be too expensive. But that’s not necessarily the case.

According to a 2021 study by Life Insurance Marketing and Research Association (LIMRA), almost half of U.S. households do not have life insurance. While the pandemic led to awareness (with 13% of Americans purchasing life insurance for the first time in 2020), the American population is still woefully underinsured. Most people without life insurance say they need it, and 42% of Americans would be financially strapped within half a year if the primary wage earner died unexpectedly, says LIMRA.

One common concern about buying life insurance is the cost. But life insurance may be less expensive than you think. According to LIMRA’s 2021 study, most Americans, especially younger generations, think life insurance costs three times as much as it does. Term life insurance for a healthy 30-year-old costs around $160 a year, per LIMRA, but 44% of millennials estimate it to be more than six times higher, at $1,000. This confusion about the cost of life insurance puts families at risk for financial hardship.

There are different types of life insurance, some more affordable than others. Term life insurance is the most affordable. It pays a benefit to your survivors when you die within a specified period of time. Whole life insurance, which combines investing with term life insurance, is more expensive.

To make life insurance more affordable, it helps to purchase a policy sooner rather than later. The younger you are, the more likely you are to be healthy, and the healthier you are, the lower the premium will be.

If you think you need a life insurance policy, we can help you determine which types of policies meet your individual circumstances and goals. Call or email us for more information.