New Resolve for a New Year

At this time of year, we look back, we look ahead. We think about the choices we’ve made in the past. We resolve to do better in 2008.

While we’re in the reflective mode, we might do well to consider the state of our insurance coverage. We don’t drive an uninsured car. We expect to carry homeowners’ insurance. We try very hard to maintain adequate health coverage. But when it comes to life insurance, we’re sometimes reluctant to make the investment.

This New Year offers reasons to reconsider.

Several industry trends, tracked by the nonprofit Life and Health Insurance Foundation for Education (LIFE), ought to make buying life insurance a more attractive option to consumers:

• Medical problems are no longer an automatic roadblock
As more effective treatments for such pre-existing medical conditions as cancer, heart disease and diabetes extend life, underwriting conventions change to reflect the new realities, making life insurance accessible to- and affordable for – more consumers. As doctors and researchers become even more efficient in tracking long-term survival, this trend is expected to continue.

• Combination products offer increased flexibility of coverage
Combinations of insurance products are coming online as packaged policies that target consumers with specific needs. According to a recent study by Life Insurance and Market Research Association (LIMRA), consumers can expect to see more policies with add-ons like the long-term care policy riders currently being offered to retiring Baby Boomers.

• Term life insurance premiums are becoming less expensive
Competition between carriers, together with the extended life expectancies, contributes to the current reduction in rates, a trend likely to carry over into 2008, according to LIMRA. The modestly priced Term Life insurance has proved especially attractive to young families.

This New Year, put some real resolve behind your resolution to take care of your own and your family’s insurance needs. Consult with an insurance professional to make your choices in 2008 wise ones.

All facts are from LIMRA International’s life insurance consumer studies.

About LIFE

The nonprofit Life and Health Insurance Foundation for Education (LIFE) was founded in 1994 in response to the public’s growing need for information and education on life, health, disability and long-term care insurance. LIFE also seeks to remind people of the important role insurance professionals perform in helping families, businesses and individuals find the insurance products that best fit their needs. To learn more about these topics, please visit http://www.lifehappens.org/.

THe Life Insurance and Market Research Association (LIMRA), is an international research, consulting, and performance improvement organization that helps more than 800 insurance and financial services companies in 60 countries increase their marketing and distribution effectiveness.

Life Insurance Provides for Children When You Can’t

As parents, we know one of our most important jobs is to provide for our children. We feed, clothe and house them. We see to it that they get a good education. We make sure they have opportunities to explore and develop their talents.

We’re there for them in so many ways.

But what happens when we can’t be there – when parents die before children are grown?

Life insurance is one way children’s material needs can be met after the demise of one or both parents. For parents in their 40s or younger, the cost-effective insurance option is term insurance. Term life insurance pays out a predetermined amount of cash within an agreed-upon term. For example: if the term limit were 10 years, and the policy set for $500,000, that amount would be paid out no matter when the death occurred – within the 10 years.

To decide whether to purchase term life insurance, and then how much insurance to buy, parents need to consider personal circumstances, including:

Age and the number of kids
What’s needed for an only child graduating college is substantially different from the projected needs of a second grader with two younger siblings. Taking into account the projected needs of each of your children makes the choice of the right term life insurance a uniquely personal decision for each.

The wage-earning capacity of each parent
If the parent who has died was the family’s major wage earner, then the insurance needs to replace that source of income, calculated over a number of years. Even if the parent who dies was a stay-at-home mom or dad, their loss means that child-care and other services they provided may now have to be purchased.

Other needs that might be served by a term life payment
End-of-life medical expenses and funeral expenses can cost thousands at a time when a surviving spouse is least able to cope with added financial stress. Term life insurance provides the necessary cash to cover those extra expenses.

Resources of extended family
Grandparents or other relatives with means may set up an educational trust, or help out in other ways. But don’t assume anything; candid discussion should result in a written life insurance plan to which all agree.

No amount of money can fully compensate for the loss of the love a parent shows every day. But careful planning that includes life insurance is a lasting testament to that love and care- one your child will come to appreciate as they mature into the adult you’ve helped them become.