So much for expensive homes, vehicles, and jewels. According to a recent survey conducted by Edward Jones and the nonprofit consumer education organization Life Happens, 81% of Americans consider their family to be their "most significant asset."
In addition, one-fourth of respondents in the adult national sample admitted that their biggest fear was burdening their loved ones with unforeseen financial obligations if they become incapacitated or pass away too soon. This raises the question :
Why don't more individuals purchase life insurance if we're so concerned about safeguarding what we value most?
Most experts will agree when you ask them that these plans can help give essential resources for anyone who has dependents to support. However, according to the most recent data, only 41% of American households have individual life insurance. According to Ken Cella, principal of the Client Strategies Group of the financial services company Edward Jones, "the majority of Americans have little to no safeguards for their financial aspirations." They may be aware of the importance of having emergency savings to handle unforeseen costs in the short term, but they lack protection against the financial consequences over the long run.
Even more frankly, Life Happens president Faisa Stafford states: "Emergency reserves aren't a long-term financial solution, especially if a family's main provider were to pass away." One or both of the following myths are to blame for a large portion of the discrepancy between what we'll refer to as "the need to protect" and the situation on the ground: * It's too expesive.
Think of this as the urban legend about alligators living in the sewers of New York City. In their 2017 Insurance Barometer Study, Life Happens and LIMRA, a global life insurance research and consulting group, asked participants to estimate the cost of a $250,000 term life policy for a healthy 30-year-old. According to NerdWallet, the median estimate was $500 per year, which is more than three times the actual annual amount of $160. However, suppose the prospective policyholder desired even greater protection for his dependents. A 20-year term policy with a million-dollar death benefit might be purchased by a healthy, non-smoking, 30-something male for $500, according to a recent calculation by Forbes magazine. Some folks spend more on caffe lattes than that each year. Nevertheless, costs can vary depending on your choice of term or permanent insurance, age, health, and the amount of coverage. The former, which is more economical, only lasts for a set period of time (often 20 years or less), but the later is perpetual (as long as you continue to pay the premiums). When deciding how much life insurance is right for you, there are a number of factors to take into account. Online tools like Edward Jones' free Life Insurance Needs calculator can help.
* The policy I have through work is good enough.
What if you're no longer working there?Group life insurance normally only offers benefits that are one or two times your yearly pay, and it is usually not transferrable. Growing families typically require more protection than that, according to Edward Jones financial adviser Scott Thoma, and they require insurance that is not dependent on employment status. Be aware that life insurance doesn't just give someone's life a dollar value. Which takes us to another another eye-opening result of the "Protect What Matters" poll conducted by Edward Jones and Life Happens. 23 percent of interviewees were unaware that it may even pay for a survivor's child's college bills.
Through Edward D. Jones & Co., L.P., as well as Edward Jones Insurance Agency of California, L.L.C., Edward Jones Insurance Agency of New Mexico, L.L.C., and Edward Jones Insurance Agency of Massachusetts, L.L.C., Edward Jones is a licensed insurance producer in all 50 states as well as Washington, D.C.
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