Imagine you passed on today, would have a financial plan for your family? These days, death and funeral arrangements cost quite a lot of money, with no life insurance, the only thing you will do to your family, is get them deep into debt.


What exactly is life insurance?


Life insurance generally refers to premiums paid to an insurance company. These premiums can be paid out to family members in case the individual under the cover dies during a stipulated time frame. Of course, life insurance has its advantages and disadvantages, all depending on the needs of individuals.


How relevant is life insurance in today’s economy?


With the fluctuations in today’s economy, most Americans have actually made life insurance a priority.  A lot of people will agree that life insurance is a steady and sure way of protecting the financial future of their loved ones. There is nothing more comforting than the peace of mind of knowing that your family is well taken care of if you were to die today.


Americans actually understand the benefits that come with life insurance, and yet there are tens of millions out there who do not have a life insurance cover. In fact, over 50% of USA households have no life insurance cover, with these households having children who are under the age of 18. This is according to a 2012 research conducted by LIMRA. This goes to show that if the breadwinner was to die today, the family would be left in financial jeopardy.


Statistics further reveal that most households in America are double income households. This means that life insurance is even more important than ever. It ensures that the standard of living of the family remains intact if one of the breadwinners died. The case is no different in households with stay at home moms. The contribution of the mother to the family is undervalued most of the time. Yet, if the mother was to die today, child care costs alone would go to as high as $30,000, annually.


A recent survey by life foundation, a non-profit firm, found that only 2% of American adults actually have any plans of applying for life insurance in the next month. The hard economic times are the main reason why most regard life insurance as a luxury. Everyone is focused on providing the basic needs; food, shelter and transportation. What you do not know is that, there are ways you can actually make life insurance affordable even with the economic downturn.


Purchase Term Life Cover


With the economic fluctuations, insurance premiums are inching higher, and the premiums increase as one ages. This means that there is only one way to save on life insurance; getting term life policies.


You can get term life cover at a premium proportion of the whole life cover. According to Dave Ramsey, a financial expert, you can actually purchase a 20 years term life cover, and invest the difference in premiums as mutual funds. This means that, if you are 30 years of age, you can buy term life insurance that costs $250,000, and pay only $7 every month. If this was a whole life cover, it would mean you paying $100 monthly. With term insurance, you would be left with $93 to invest in mutual funds. At the end of the 20 years, you will have life insurance and mutual savings.


Life Insurance In The Future


The 2013 budget is expected to impose higher taxes for life insurance owned by corporate as well as on the insurers’ DRD (dividend received deduction). This means that these new taxes will raise the business life insurance expenses; meaning clients will pay more for whole life insurance.


Regardless of the economic hardships and what the future holds for insurance premiums, life insurance is an investment worth making for the benefit of your loved ones.  Click here to learn more about life insurance during these hard economic times.


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