Life insurance is one of the most versatile financial planning tools available, but most Americans don’t have enough coverage for their economic situation, according to LIMRA. The organization discovered that approximately half of the U.S. population believes it needs more life insurance, and it’s likely more people don’t realize they are underinsured. As baby boomers move into retirement and younger generations become higher earners, financial professionals need to work with consumers and ensure these individuals are incorporating life insurance policies into their overall retirement plans.
While the majority of Americans have life insurance, the amount of individual coverage has declined during the past 50 years, LIMRA reported. That puts these people at a huge disadvantage when a need arrives that triggers life insurance benefits. Because these consumers carry some amount of coverage, they may mistakenly think their loved ones will be taken care of following their death. That’s simply not true, as the actual value of most life insurance policies is too low for the policy to achieve its intended purpose.
Most people view life insurance products as a safeguard against the loss of income that arises when a breadwinner dies or as a way to transfer wealth to the next generation. Financial professionals should include in their conversations with clients the need for insurance products that will also provide a level of supplemental income in retirement, because too few people realize they can leverage life insurance this way.
Now that the economy is at its strongest point in several years, insurance producers may want to evaluate how they have presented annuities in the past and consider new tactics that emphasize the value provided by these products. Consumers know they need more insurance, but they aren’t sure what they should purchase. Financial professionals can provide the guidance individuals need.