Consumer Connection: September is Life Insurance Awareness Month

Sonya Sellmeyer

By Sonya Sellmeyer, Consumer Advocate Officer for the Iowa Insurance Division.

September is Life Insurance Awareness Month, and according to the Life Insurance and Market Research Association (LIMRA), only 31% of consumers claim to be extremely or very knowledgeable about life insurance. In order to help Iowans learn the basics of insurance and financial literacy, the Iowa Insurance Division has developed the Save4Later website. Since life insurance can be complicated, this website aims to assist individuals in retiring, saving, earning, and planning.

Once the policy is disbursed, you will also select an alternate beneficiary in the event that the primary beneficiary is deceased. You can even designate a charitable organization or place of worship to receive the benefits, or you can choose multiple beneficiaries with varying percentage distributions. This can also aid in the preservation of wealth across generations. The payout can be used to assist with covering funeral costs, mortgage or rent payments, everyday living expenses, college tuition, outstanding loans, and medical bills that are not covered. Life insurance serves as a safety net during difficult times if a loved one, who contributed to the household income, unexpectedly passes away. Upon your death, life insurance provides a death benefit to the individuals you have named as beneficiaries.

According to LIMRA, %59 of uninsured consumers and 60 million families don’t have adequate coverage, which means they are in need of life insurance. Speaking with a licensed life insurance agent will assist you in determining the correct type and amount of coverage that is best for your financial situation. As the name states, term insurance provides coverage for a specific period of time and is usually very affordable. Cash-value life insurance protects you as long as you pay the premiums and it also builds cash value over time. After receiving the policy, always review and ensure that you understand all the terms and conditions. You have a 10-day free look period where you can return it to the insurer and receive a refund if the new policy is a replacement for an existing life policy. Periodically, review all your insurance policies to ensure that the coverage, terms, and amounts still fit within your needs.

Based on LIMRA’s findings, a mere 47% of women possess life insurance in contrast to the 58% of men who do. Additionally, a mere 22% of women feel highly informed about life insurance. In order to address this disparity, the Iowa Insurance Division has developed SmartHER Money, a complimentary resource designed to educate and empower women on financial matters. Consequently, women exhibit a lower tendency to own life insurance.

Caregivers often encounter old life insurance policies among the belongings of a beloved individual. The National Association of Insurance Commissioners offers a free life insurance policy locator that can aid in locating long-lost life insurance policies belonging to your deceased family member or loved one.

Understanding the importance of life insurance in your financial strategy is crucial for safeguarding your family’s economic future.