September is National Life Insurance Awareness Month, and is the perfect time for those looking to purchase a life insurance policy to start comparing their options, or for those who own policies to review their internal rate of return.
The Life and Health Insurance Foundation for Education, a nonprofit organization working to create awareness of insurance options, created tips to help consumers determine which policy to purchase. According to the source, there are two basic variables to consider: how much money will be needed at death to meet immediate obligations and how much future income is needed to sustain the household.
First, consumers must calculate the sum of all final and obligatory expenses including funeral costs, estate settlement costs, outstanding debts and student loans. Next, consumers should figure out the present value of future capital needs. This is basically totaling up all current expenses that would need to be taken care of if the consumer were to die tomorrow. Having these numbers handy when speaking with an insurance agent or comparing rates online will help customers decide which policy suits them best.
According to LIMRA, only 41 percent of U.S. adults have life insurance, leaving 95 million Americans without policies. Today, 61 percent of men are likely to own life insurance, and only 57 percent of women, while only 10 percent of insured adults own both permanent and term life insurance policies.