The United States has a significant life insurance coverage gap. Millions of American adults either need to establish a life insurance policy or need more coverage than they expect, according to a recent study by the Life Insurance Marketing and Research Association (LIMRA).
Forty-one percent of U.S. adults lack a solid understanding of life insurance – a gap that, combined with cost and competing financial priorities, often keeps people from getting the life insurance coverage they need. Many folks assume their work is handling it, but from what we’ve seen, that coverage may not be enough for many.
In this blog, you’ll learn what insurance analysis is, why it matters, some common misconceptions about life insurance, and how StrategicPoint can help you navigate the process to fit your family’s needs.
Why Insurance Analysis Matters
Insurance analysis is key to determine the right – and enough – coverage is in place to help maintain financial stability and protect against uncertainty in your personal and family life. This process helps you:
1. Avoid gaps in coverage and unnecessary premiums through routine review.
2. Stay prepared to handle many financial surprises life brings your way.
3. Align your insurance decisions with your overall financial strategy.
Insurance needs can vary by generation, and life changes quickly. Major milestones like marriage, the birth of your children, retirement, new assets, divorce or death can shift your family’s insurance needs, so it’s important to reassess your coverage when these milestones occur and at least once per year otherwise.
Delaying insurance analysis can have hidden – but significant – consequences. Today, you are the youngest you’ll ever be again, which means your insurance premiums will likely only go up from here. Changes in your health may have an impact on your coverage options as well.
Common Misconceptions About Life Insurance
You may have some knowledge of life insurance and where it might fit into your financial plan, or maybe you’re cautious about whether you need it at all. Let’s clear up some misconceptions to help you better understand life insurance:
1. “My employer provides life insurance coverage, and that’s enough for me.”
• Oftentimes, workplace coverage is limited, and if you change jobs, your policy may not carry over. While it may be a good idea to take advantage of the policy your job offers, work with your advisor to assess its limitations and any additional needs.
2. “Life insurance is for old people – I’m too young for it.”
• Contrary to popular belief, young people can benefit greatly from a life insurance policy. If you’re in good health, you could get affordable coverage now to support your future – when premiums will likely be more costly.
3. “I won’t qualify for life insurance due to my health condition.”
• There are options for people with pre-existing medical conditions. An advisor can help you identify a policy that meets your needs no matter your health.
4. “It’s too expensive.”
• Cost is often determined by factors such as age, health and policy structure. With the help of an advisor, you may find appropriate coverage at an affordable cost to fit your lifestyle.
Strengthening your grasp on life insurance is a great first step toward understanding and approaching it with greater clarity and confidence. Our team of advisors at StrategicPoint can help you make informed decisions to determine whether your coverage aligns with your goals and lifestyle.
How StrategicPoint Helps Clients Assess Options
It’s easy to feel uncertain about the kind and amount of coverage you need. At StrategicPoint, insurance analysis is designed to support your financial plan. Our advisors help clients:
• Evaluate Insurance Needs
-Coverage should align with your broader plan. A thorough insurance analysis reviews your assets and liabilities to determine which type and how much life insurance coverage aligns well with your lifestyle and financial goals.
• Review Insurance Coverage
-Your needs will change over time, which makes regular reviews imperative to determine you’re neither under- nor overinsured as your financial circumstances evolve and potentially get more complex.
• Consider Long-Term Care
-It’s hard to predict what the future holds. Long-term care insurance covers extended care costs should you need in-home care or nursing home options in the future. Through insurance analysis, we can help you determine when long-term care insurance fits your needs and financial plan.
A thoughtful insurance analysis helps you protect what matters most and confirms your coverage aligns with your goals. At StrategicPoint, we’re here to help you evaluate your insurance needs and give you the confidence that your plan is comprehensive and matches your lifestyle. Connect with our team of advisors to review your coverage as part of your long-term strategy.
Kristina Mello, MBA serves as Senior Advisor and Director of Financial Planning at StrategicPoint Investment Advisors in Providence and East Greenwich. You can e-mail her at kmello@strategicpoint.com.
The information contained in this post is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein. Kristina’s opinions and comments expressed on this site are her own and may not accurately reflect those of the firm or our parent company, Focus Financial Partners. Third-party content does not reflect the view of the firm and is not reviewed for completeness or accuracy. It is provided for ease of reference.
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