Volume 25
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How Has COVID-19 Changed Life Insurance?
Gregory L. Hoernschemeyer, CLU, Senior Vice President, Registered Representative The pandemic caused people to reassess their priorities and has raised awareness about the important role life insurance plays in families’ financial security. Research shows 42% of Americans would face financial hardship within six months if the primary wage earner were to die unexpectedly. Adequate life insurance coverage is the foundation for a secure financial future.
provide it for your family and how long your family could continue its current standard of living without your income. It is important to replace this income to pay expenses, meet debt obligations and save for the future. Below are estimated benefits required to replace an annual income stream of a deceased wage earner.
Many current life insurance products offer features that provide living benefits for chronic and terminal conditions. These features provide access to a portion of your death benefit if you are diagnosed with a qualifying illness. Living benefits may be the most important aspect of modern life insurance because a serious illness can affect anyone and place additional strain on your family’s finances.
Another misconception about life insurance is that it’s difficult to obtain. In actuality, life insurance companies pivoted in response to the pandemic to help consumers expedite the buying process online with accelerated underwriting. Accelerated underwriting uses available data to assess your health rather than relying primarily on medical exams and lab results. Please note that not everyone will be eligible for accelerated underwriting based on their health and other factors. If you think accelerated underwriting is the right fit for you, you can initiate the process without a medical exam or lab work.
Many Americans rely solely on life insurance offered through their employer to protect their family. Unfortunately, losing your job also means the loss of benefits, including group life insurance. Group life insurance is usually not portable; if it is, it may be cost prohibitive. More than 33% of Americans plan to purchase life insurance each year but assume it is too expensive. Most individuals overestimate the cost by three times or more.
The Process
Purchasing a life insurance policy to replace your income is one of the most meaningful things you can leave behind for your family. To begin the process, contact me: Gregory L. Hoernschemeyer 800.544.8306 GregH@horanassoc.com
How Much Do You Need?
When you consider your current expenses, evaluate how your income would be replaced if you were unable to
Net Monthly Income (Money that hits the bank account)
Approximate Death Benefit Needed to Replicate Monthly Cash Flows
Monthly
Annually
10 years
20 years
30 years
$2,500
$30,000
$286,000
$545,000
$779,000
$5,000
$60,000
$572,000
$1,089,000
$1,557,000
$10,000
$120,000
$1,143,000
$2,177,000
$3,113,000
$15,000
$180,000
$1,715,000
$3,265,000
$4,670,000
$20,000
$240,000
$2,286,000
$4,354,000
$6,225,000 www.horanassoc.com
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