Sunday, April 14, 2013

Why Are Life Insurance Policies in Decline?


Why Are Life Insurance Policies in Decline?

According to the Life Insurance and Market Research Association, or LIMRA, 56 percent of U.S. households did not have an individual policy as of 2010, a 50-year high. Many speculate that this is due to the lack of mandatory regulation to have any type of life insurance. Because vehicular and home insurance is mandatory, there is a disproportionate number of people who hold those types of insurance policies, but claim that they don’t have enough funds to afford life insurance. There are numerous other reasons that can account for this decline in life insurance policy holders however a few of the most prevalent reasons can be found below.

Common Excuses

Another excuse that is common in the younger generation is due to procrastination. They feel like they don’t need life insurance right now, and can always get it when they’re older. They may feel invincible and not at risk of dying, thus negating the need for holding a life insurance policy. However, what they don’t realize is that they are the perfect age (and health) to lock in great rates. Young people in their 20’s and 30’s can acquire the best rates on a life insurance policy, yet many are not taking advantage of this. Ultimately, they might reach out to find insurance once they are older, or have developed a pre-existing condition. This would increase their monthly premiums, and may even cause them to be denied. The older generations are dubious about getting life insurance because they don’t believe that it will actually be passed down to their beneficiaries. This mindset is from a lifetime of watching the government and businesses go through expansionary phases that inevitably lead to major recessions. Their faith has been shaken.

Undervaluing Life Insurance

Typically, people buy insurance online because of ease of comparing rates. The fact that there are less insurance agents knocking on doors and signing contracts face to face around kitchen tables, may also be a factor in the declining number of families who hold insurance policies.Nearly 80% of families don't have a personal life insurance agent or broker, according to LIMRA. Since there are less policies being bought, insurance agents who sell them are not making enough to cover their expense.There is less pressure to buy, so people undervalue its significance. Having a safety net in case of an unexpected event can save your family from financial strain and even ruin. Yet, many are forgoing life insurance, and leaving their family’s financial stability to fate.

Finding the Right Agent

There are many skilled life insurance brokers that can assist you in finding the right type of insurance policy for your age and coverage needs. It is important to do your own research. When it comes down to it, a knowledgeable professional, with extensive background experience, can help you sort through all the confusion and even explain the fine print. They can provide you with the right policy that gets you the best coverage for the lowest price.

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