7 Must-Know Facts to Maximize Life Insurance Awareness Month

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With the arrival of September, we are presented with the perfect opportunity to emphasize the importance of life insurance. Designated as Life Insurance Awareness Month, this period is ideal for engaging in meaningful discussions about life insurance and reviewing your coverage. Ensuring your policy aligns with your current needs and circumstances is crucial for peace of mind and financial security. Here are seven must-know facts to help you maximize Life Insurance Awareness Month.

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7 Must-Know Facts for Life Insurance Awareness Month

Now, for a little background on Life Insurance Awareness Month. LIAM was created in 2004 by Life Happens. The organization is a non-profit committed to empowering individuals by educating them on personal financial responsibility, focusing on life insurance and related products.

Since its establishment in 2004, Life Insurance Awareness Month has evolved into a comprehensive nationwide campaign, held every September. The primary objective of LIAM is to enlighten individuals across America about the significance of life insurance, empowering them to obtain the necessary coverage for their needs.

Life insurance holds significant importance, yet it can often seem intimidating. In honor of Life Insurance Awareness Month, we’re presenting seven essential facts you need to know about life insurance. September offers a great chance to deepen your understanding and prepare for the future.

1. Deciphering the Power of Life Insurance: Beyond Your Benefit

Life insurance often faces a stigma, with many dismissing its benefits and questioning, “Why bother? It won’t benefit me.”

Before moving forward, let’s address the obvious: life insurance may not be the most exciting topic, but it plays a vital role. With Life Insurance Awareness Month upon us, it’s the perfect opportunity to reflect on our mortality. Most importantly, the understanding that life insurance isn’t for us—it’s for the loved ones we leave behind. While it might not be a pleasant subject, grasping the importance of life insurance is essential for ensuring the financial security of those who matter most.

Six months. According to the 2021 Insurance Barometer study, that’s how long it would be before 42% of Americans would face financial hardship if they lost a primary wage earner. One in four Americans would face financial difficulties within a month.

Cracking the Code to Wealth: Your Solution to Financial Struggles

The solution to financial hardship is relatively simple: obtaining life insurance. Surprisingly, over 102 million Americans are either underinsured or have no life insurance coverage at all.

The COVID-19 pandemic has profoundly shifted consumer perspectives on life insurance. In 2021, 31% of Americans reported being more likely to seek coverage. This interest jumps to 42% among those who have tested positive for COVID-19, highlighting an increased inclination to purchase life insurance this year.

The COVID-19 pandemic has notably heightened the likelihood of Black and Hispanic Americans, Millennials, and men to purchase life insurance.

Unleash the Power: Securing Your Loved Ones’ Financial Future

Life insurance is an essential tool for securing the financial future of your loved ones while addressing immediate needs. By choosing life insurance, you provide ongoing support for those who matter most. On the other hand, if you opt not to, the choice is entirely yours. It’s crucial to understand that in unforeseen circumstances, life insurance can make all the difference. It can determine whether your loved ones can afford housing expenses, like a mortgage or rent, or face the threat of homelessness. As a financial professional, I strongly recommend considering life insurance as a vital part of your financial strategy.

While it may not be the most pleasant topic, it’s essential that we address it. Life Insurance Awareness Month seeks to foster open discussions about these challenging subjects rather than avoiding them.

2. Protecting Her Legacy: The Essential Role of Life Insurance for Women

Over the past few decades, the economic landscape has significantly evolved, especially for women. These changes have reshaped your financial role both personally and professionally. Whether you are the primary or sole breadwinner, it’s essential to carefully evaluate your current life insurance needs. As we advance in life, our life insurance requirements also shift. While these changes may not occur annually, reviewing and reassessing your needs every few years is advisable.

The great news is that life insurance tends to be more affordable for women compared to men of the same age. This is primarily due to differences in life expectancy. Women naturally have a longer lifespan than men. Additionally, obtaining a life insurance policy at a younger age and in good health can further contribute to cost savings. If we were to compare a man and a woman of the same age and health standing, the woman’s policy would be comparatively less expensive.

Critical Moments for an In-Depth Policy Review

There are pivotal times in life when a thorough policy review becomes essential. It’s important to schedule a comprehensive policy review with your financial consultant to ensure your coverage remains adequate and aligns with your evolving goals and circumstances. Life events such as changes in income, family size, or financial obligations may require adjustments to your current policies.

Insurance Dilemma: Do Those Without Dependents Really Need It?

Is it advisable to forgo insurance if you have no dependents? Generally, the answer is no, as insurance provides protection against unforeseen events and financial difficulties. However, it’s essential to evaluate your specific situation. Considerations like financial stability, health, and future plans play a role in this decision. Even without dependents, certain insurances, such as health or disability, can offer significant benefits. Meeting with a financial consultant is a wise step to ensure peace of mind and craft a plan suited to your individual needs.

3. Securing Your Finances: Why Life Insurance is a Must-Have

Life insurance is a crucial component of your financial strategy. Even with your investments properly managed, having a life insurance policy provides an additional layer of protection and is a crucial piece of your financial health.

Life Insurance Awareness Month offers the encouragement needed for individuals to secure a policy before the holiday season. It underscores the essential role of life insurance in any robust financial plan and achieves the following:

Income Replacement

Have you considered if there are sufficient funds to cover your burial expenses? Additionally, how would outstanding debts, final expenses, and your household’s monthly costs be managed? Could your partner afford to take extended time off work to adjust to their “new normal” without you? Addressing these considerations is important for peace of mind.

Mortgage-Free or Rent Relief?

Given that a typical mortgage can extend up to 30 years, would you prefer to have your remaining balance fully paid off? It’s important to consider not only the monthly mortgage payment but also the ongoing real estate taxes, homeowners’ insurance, and other related costs. If you rent, how long would you like your significant other to remain settled to avoid any additional disruption in their life from moving?

To ensure your family or loved ones can continue living comfortably in your home after you’re gone, it’s crucial to consider ongoing costs. These expenses can become a long-term financial responsibility, so it’s important to plan for them thoughtfully.

4. Why Single People Shouldn’t Skip Life Insurance: Protecting Your Future Matters

You may believe the facts mentioned above don’t apply to you—think again! Life insurance is important not only for those who are legally partnered but also for single individuals. It provides financial security and peace of mind, ensuring that in the event of an unforeseen circumstance, your loved ones or dependents are protected. Even if you’re single, consider future expenses and responsibilities like supporting aging parents or covering outstanding debts. Life insurance is a crucial component of a comprehensive financial plan, regardless of your relationship status.

If you’re single, especially if you don’t have any children, I want you to consider these two questions concerning your life insurance needs:

Decoding the Need: Two Questions to Determine if Life Insurance is Essential

  • Are you responsible for the care of an aging parent, sibling, or another individual under your legal responsibility?
  • Do you hold a lot of debt?
    • Outstanding mortgage
    • Business loans
    • Personal loans
    • Student loans
    • Car loans

Lastly, do you have a co-signer for any unsettled debts? This aspect is crucial to understand. Generally, upon your passing, the executor of your estate will liquidate assets to help settle your outstanding obligations. However, it’s important to note that if you have a co-signer on any loans, they become legally responsible for repayment. If they had been fully aware of these implications, they might have reconsidered their decision to co-sign.

5. Secure Your Success: Life Insurance for Business Protection

As a business owner, life insurance offers significant potential for fulfilling multiple objectives. Entrepreneurs, pay attention to these two crucial considerations:

Life insurance for key employees, often referred to as “key person insurance” or “business life insurance,” is essential for protecting your company against the loss of indispensable team members. This coverage ensures business continuity by not only covering the expenses associated with training and filling the vacant role but also maintaining seamless operations.

Ensure Business Continuity: Secure Your Buy/Sell Agreement with Life Insurance

Life insurance can be utilized to fund a Buy/Sell Agreement, a structured business continuation plan. In this arrangement, a designated buyer is legally committed to purchasing the business stake. The death benefit from the life insurance policy allows the buyer to acquire the deceased owner’s share. The advantage? The buyer is required to make the purchase, and the seller (or seller’s estate) is also legally bound to sell the business share in the future under certain circumstances:

  • Death
  • Disability
  • Retirement

From my experience with numerous business owners, I’ve discovered that life insurance is an excellent option for safeguarding business interests. It provides a crucial safety net and offers various opportunities to leverage life insurance for the seamless operation of your business.

6. Leaving a Legacy: Unveiling the Power of Life Insurance

Have you considered leaving a lasting legacy through your giving? A life insurance policy can be an excellent tool for philanthropic contributions. Here are two ways to explore:

Crafting a Lasting Legacy

Use an insurance policy to grow your money and increase the size of your estate to your beneficiaries. The Death Benefit (Face Amount) of your policy is what your beneficiaries receive, potentially offering them a significantly larger legacy. There are various ways to structure your life insurance policy to suit your specific circumstances. It’s advisable to consult with your tax advisor to understand your unique situation.

Generosity in Action: The Power of Charitable Gifting 

Donate Your Life Insurance Policy: A Meaningful Transfer of Ownership

If you’re feeling philanthropic, consider donating your life insurance policy to a charity, potentially enabling a larger contribution than you might otherwise afford. To make a lasting gift during your lifetime, you can transfer ownership of your policy to the chosen organization. By naming the charity as the beneficiary, its death benefit will go to them upon your passing, with the charity managing it as the new policy owner.

Choose Your Cause: Make a Charity Your Beneficiary

You can designate a charity as the beneficiary of your policy while maintaining ownership, enabling you to support a cause you care about without relinquishing control. This option is ideal if your family no longer needs the life insurance policy, perhaps because your children are financially independent or you’ve accumulated enough assets. By doing so, you can make a meaningful impact on the charity, providing future financial support and potentially gaining tax benefits.

Secure a Fresh New Policy for Your Charity

You might consider purchasing a new life insurance policy with the charity as the owner from the beginning. This allows you to receive a tax receipt for the policy’s cash value and for any premiums you pay. However, it’s important to be aware of certain limitations with this approach.

Enhance Your Legacy: Tax Benefits & Charitable Impact with Life Insurance Donations

  • Income Tax Deductions: If you itemize your taxes, you might be eligible to claim an income tax deduction
  • Estate Tax Reduction: You might be able to decrease your estate tax liability
  • Champion Your Favorite Causes: You can support your favorite causes both during your lifetime and beyond

Before donating your policy, reach out to the charity to ensure they can accept it. Collaborate with a tax expert to tailor a strategy to your specific situation. Effective estate planning involves minimizing taxes and establishing gifts. The government incentivizes donations by providing tax benefits. Verify that the charity is qualified so both you and the organization can benefit. Always consult your tax advisor to address your individual circumstances.

7. Confidence Unleashed: Master the Underwriting Process

Now that you’re familiar with how life insurance benefits you, your beneficiaries, and your company, we’ve also delved into its philanthropic advantages.

It’s important to address a common concern: many individuals hesitate to apply for life insurance due to the underwriting process. I completely understand!

If you don’t fit the typical mold of a “perfect specimen” (most of us don’t) and prefer to avoid needles, urine samples, and comprehensive medical exams, there’s encouraging news! Simplified Underwriting (SUW) is gaining popularity in the insurance industry, providing coverage without the necessity of a full medical examination.

The Irresistible Charm of Simplified Underwriting

The appeal of simplified underwriting remains strong; and people were either “somewhat” or “much more likely” to purchase life insurance when a simplified underwriting approach was used. This makes it a compelling choice compared to traditional underwriting methods.

There are numerous benefits to the simplified underwriting approach:

  • It’s fast and easy.
  • It is impartial and objective.
  • The explanations of risk and pricing are clear and transparent.
  • It allows you to avoid the necessity of visiting a doctor.
  • It allows you to skip the medical exam, along with the blood and urine tests.
  • It doesn’t necessitate an in-person conversation.

If you’ve been considering purchasing a life insurance policy but have been hesitant, Life Insurance Awareness Month is the perfect time to explore the benefits available to you and your loved ones, especially before the holidays.

Protect Your Legacy with Burhoe Insurance Solutions

Secure your legacy with Burhoe Insurance Solutions. Our team of seasoned professionals is committed to providing you with comprehensive coverage that perfectly aligns with your unique financial needs. Whether it’s safeguarding your home, protecting your business, or ensuring your family’s future, let us help you safeguard what truly matters. Place your confidence in our unparalleled expertise and personalized approach to insurance planning. Take the first step towards a secure future by contacting us today.

If purchasing a life insurance policy has been on your mind, yet you’ve been hesitant, there’s no better time than during Life Insurance Awareness Month (and, especially before the holidays) for utilizing all the benefits available to you and those you care for most.

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