hgazette.com, Haverhill, MA


September 21, 2011

Benefits of life insurance people often overlook

You may be unaware of it, but September is Life Insurance Awareness Month. And while a whole month may seem like a long time to focus on life insurance, it's actually a good opportunity for you to realize the important role that life insurance can play in your life.

Unfortunately, many people don't have sufficient insurance. A recent report by LIMRA, a research and consulting group, shows the following:

Individual life insurance ownership among U.S. households has reached a 50-year low.

Three out of every 10 households (about 35 million households) currently have no life insurance — an increase of 11 million households since 2004.

These figures help explain why the nonprofit LIFE Foundation coordinates Life Insurance Awareness Month each September. Simply put, many people don't realize how many ways life insurance can help them and their families.

To be specific, life insurance can:

Educate your children — If you were to die prematurely, your life insurance policy can pay, in whole or in part, your children's college education. And if you live a normal life span, life insurance can help to pay for your grandchildren's college education.

Pay off your mortgage — If you have sufficient life insurance, the death benefit can pay off your mortgage, so your family wouldn't have to move.

Help pay for your spouse's retirement — Your spouse might be counting on sharing some of the money you eventually withdraw from your retirement plans, such as your 401(k) and IRA, to help with his or her own retirement. If you were to die early, your spouse, as beneficiary, would receive the existing account balances in these plans, but your future contributions would, of course, die with you.

Help pay for your retirement — You don't even have to die to reap some benefits from your life insurance. If you've purchased some form of permanent insurance, such as whole life or universal life, you have the opportunity to build a cash balance. And through policy loans or withdrawals, you can tap into this cash to help you pay some of your expenses during retirement.

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