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 Studies
show that less than half of American adults in Maryland
own individual life insurance, and the average American
adult has just $45,000 of life insurance. Relying
on the group life insurance provided at work can
build a false sense of security, because coverage
is usually insufficient for family needs and generally
ceases when employment terminates. Experts agree
that few people protect their own “full value” with
life insurance, leaving their families at risk.
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Life Insurance Helps You To Be Prepared
The loss of human life is tragic
in many ways. The financial results alone of such a loss
can be devastating. If the principal breadwinner dies,
the spouse might not be able to maintain the family on
social security benefits. If there were two breadwinners
in the family, the surviving spouse might not be able to
maintain the family’s lifestyle on his or her income
alone. The death of a single parent might leave dependent
children without an adequate source of support.
Costs Associated with Death
When an individual dies, he or she typically leaves behind
certain costs associated with death, which include
- Doctor and hospital bills
from a final illness or accident
- Funeral expenses
- Estate taxes
- Debts (credit cards, loans)
In addition, to those individuals
leaving behind a family or others who are
financially dependent on them for support, the following financial
needs will
immediately become apparent:
- Mortgage payments
- Immediate income needs—to
pay for groceries, utilities, car payments,
and other day-to-day living expenses
- Longer-term needs—money
to pay for children’s education, retirement
income for a spouse
The insurance producer is the person
most qualified to help potential insureds select the contract
of insurance that will best meet their needs. This needs
analysis can be accomplished by identifying the specific
financial objectives of the individual by means of a fact-finding
interview.
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