Life Insurance Awareness Month: Is Your Family Properly Protected?
September is Life Insurance Awareness Month, making it a great time to ask a question many of us would rather put off: What would happen financially to the people you love if you were no longer here?
Life insurance is easy to postpone. You have bills to pay, work to do, kids to take care of, retirement to think about, and a dozen other things competing for your attention. But life insurance is ultimately about making sure the people who depend on you have financial protection if something unexpected happens.
If you live in Phoenix, Scottsdale, Mesa, Chandler, Gilbert, Queen Creek, or another Arizona community, Life Insurance Awareness Month is a good reminder to review what you currently have, determine whether it is still enough, or explore life insurance options if you do not have coverage yet.
Daisy Nadolski helps Arizona individuals and families understand their life insurance options and find coverage that fits their needs, priorities, and budget.
Ready to review your life insurance options? Schedule a free consultation with Daisy today.
What Is Life Insurance?
Life insurance is a contract between you and an insurance company. You pay premiums for your policy, and if you pass away while qualifying coverage is in effect, the policy provides a death benefit to the beneficiaries you have chosen, subject to the terms of the policy.
That money can help the people you leave behind manage financial responsibilities at an incredibly difficult time.
Depending on your family's circumstances, life insurance proceeds might help with expenses such as:
Mortgage or rent payments
Everyday household expenses
Outstanding debts
Childcare
Education expenses
Funeral and final expenses
Lost household income
Future financial needs
Life insurance is not only about replacing a paycheck. It is about considering the financial impact your absence could have on the people who depend on you.
Who Needs Life Insurance?
There is no single rule determining who needs life insurance.
You may want to consider coverage if another person would experience a financial hardship if you died.
That can include people who:
Are married or have a long-term partner
Have children or other dependents
Own a home
Have significant debts
Own a business
Financially support aging parents or other relatives
Want to provide money for final expenses
Want to leave financial support for loved ones
Life insurance needs can also change considerably throughout your lifetime.
The policy you purchased when you were 30 may not be appropriate when you are 45 or 55. Marriage, children, divorce, a new home, career changes, growing income, debt, retirement planning, and other major life events can all change how much protection makes sense.
That is why periodically reviewing your coverage is so important.
How Much Life Insurance Do You Need?
This is one of the most common questions people ask about life insurance, and there is no universal answer.
Some online advice recommends simply multiplying your annual income by a certain number. While that can provide a starting point, your actual life insurance needs are more personal.
Consider questions such as:
How much income does your household depend on you to provide?
How many years would your family need that income replaced?
How much is left on your mortgage?
Do you have other significant debts?
Do you have children who will need financial support?
Do you want to provide for future education expenses?
Does your spouse or partner work?
How much do you currently have in savings and other assets?
Do you already have life insurance through your employer?
Are there other people who depend on you financially?
For example, two Phoenix families earning exactly the same income could have completely different life insurance needs. One may have young children and a large mortgage, while another may have grown children, substantial savings, and a nearly paid-off home.
The right amount of coverage should be based on your life, not simply a generic formula.
Term Life Insurance vs. Permanent Life Insurance
One of the first decisions you may encounter when shopping for life insurance is choosing between term and permanent coverage.
Understanding the basic difference can make the process much less intimidating.
Term Life Insurance
Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years.
If the insured person dies while qualifying coverage is active during that term, the policy pays the death benefit according to the policy terms.
Term insurance is often used to protect financial responsibilities that have a timeline.
For example, you might want coverage while:
Your children are growing up
You are paying a mortgage
Your family relies heavily on your income
You are building retirement savings
Term life insurance is often less expensive initially than permanent life insurance for the same amount of death benefit, although pricing depends on numerous individual factors.
Permanent Life Insurance
Permanent life insurance is designed to provide coverage for your lifetime as long as policy requirements are met.
There are different types of permanent life insurance, including whole life and universal life policies.
Some permanent policies also accumulate cash value over time.
Permanent life insurance can be appropriate for certain long-term goals, but it is generally more complex than term insurance.
Neither option is automatically better.
The right type of life insurance depends on what you need the policy to accomplish, how long you need protection, your budget, and your overall financial situation.
Not sure which type of life insurance makes sense? Daisy can help you compare your options and understand the differences.
Do Stay-at-Home Parents Need Life Insurance?
This is an important question that families sometimes overlook.
A stay-at-home parent may not bring home a traditional paycheck, but replacing everything that person contributes to the household could be expensive.
Consider the potential cost of replacing:
Childcare
Transportation
Meal preparation
Household management
Before-school and after-school care
Other daily responsibilities
If a stay-at-home parent passed away unexpectedly, the surviving parent might need to pay for services that were previously handled within the household.
Life insurance can therefore be worth considering for both income-earning and non-income-earning parents.
Is Life Insurance Through Your Employer Enough?
Many employees receive some life insurance as part of their workplace benefits.
That is valuable coverage, but it does not automatically mean you have enough.
Employer-provided policies may only provide a limited death benefit, such as one or two times your annual salary. Depending on your family's financial needs, that amount may not provide sufficient long-term protection.
There is another issue to consider: what happens if you leave your job?
Some employer-sponsored coverage may not follow you when your employment ends.
Having an individual life insurance policy can provide coverage that is independent of your employer.
If workplace life insurance is currently your only coverage, Life Insurance Awareness Month is a great time to review exactly how much protection you have.
When Should You Review Your Life Insurance?
Life insurance should not necessarily be something you purchase once and never think about again.
Consider reviewing your coverage after major life changes, including:
Getting Married
Marriage often creates new shared financial responsibilities.
Having or Adopting a Child
A growing family can dramatically change the amount of financial protection you need.
Buying a Home
A mortgage is often one of a family's largest financial obligations.
Changing Jobs
A job change may affect employer-sponsored life insurance benefits and household income.
Starting a Business
Business ownership can create additional financial responsibilities that should be considered when reviewing insurance.
Getting Divorced
Divorce may affect your beneficiaries and overall coverage needs.
Experiencing a Significant Change in Income
As your income and lifestyle change, the amount of protection your family needs may also change.
Approaching Retirement
Your reasons for carrying life insurance may change as children become independent, mortgages are paid down, and retirement assets grow.
Even if nothing dramatic has happened recently, reviewing your life insurance every few years can help ensure it still reflects your current life.
Do You Need Life Insurance If You Are Single?
Maybe.
Being single does not automatically mean life insurance is unnecessary.
Consider whether anyone depends on you financially. You may help support a parent, sibling, child, or another family member.
You may also have debts or final expenses that could create a financial burden for someone else.
Your current health and future plans can also factor into the decision. Life insurance eligibility and pricing can change as you age or if your health changes.
The important thing is to evaluate your actual situation rather than assuming life insurance is only for married couples with children.
What Determines the Cost of Life Insurance?
The price of life insurance varies from person to person.
Insurance companies may consider factors including:
Age
Health
Medical history
Tobacco use
Coverage amount
Type of policy
Length of coverage
Other underwriting factors
This is also why comparing life insurance options can be valuable.
The least expensive policy is not necessarily the right policy, and the most expensive policy is not necessarily the best.
You want coverage that fits both your financial goals and your budget.
Why Life Insurance Awareness Month Matters
Life Insurance Awareness Month is not about creating fear. It is about starting a conversation that is easy to postpone.
Life Happens, the nonprofit organization behind Life Insurance Awareness Month, reports that millions of American adults need life insurance or additional coverage.
The issue is often not that people believe life insurance is unimportant. It is that figuring out what kind of policy to purchase and how much coverage they need can feel complicated.
September provides a simple reminder to stop and review the protection you currently have.
Ask yourself:
Do I currently have life insurance?
Do I know how much coverage I have?
Who are my beneficiaries?
Does my coverage still match my family's needs?
Has my financial situation changed?
Would my family be financially secure without my income?
Is all of my coverage tied to my employer?
Have I reviewed my policy recently?
If you cannot confidently answer those questions, this is a good time for a life insurance review.
Life Insurance in Phoenix and Surrounding Arizona Communities
Life insurance is personal. The right policy for your neighbor, coworker, or friend may not be the right policy for you.
Daisy Nadolski works with individuals and families throughout Phoenix, Scottsdale, Mesa, Chandler, Gilbert, Queen Creek, and surrounding Arizona communities to make the process easier to understand.
Instead of trying to sort through policies and terminology on your own, you can discuss your goals, financial responsibilities, family situation, and budget with someone who can help you understand your available options.
Whether you are purchasing life insurance for the first time or wondering whether your current coverage still makes sense, a review can give you a clearer picture of where you stand.
Frequently Asked Questions About Life Insurance
What is Life Insurance Awareness Month?
Life Insurance Awareness Month is observed every September to help educate consumers about life insurance and encourage individuals and families to evaluate their financial protection.
How much life insurance do I need?
There is no universal amount. Your coverage needs can depend on your income, debts, mortgage, dependents, savings, future expenses, and other financial responsibilities.
What is the difference between term and whole life insurance?
Term life insurance provides coverage for a specified period. Whole life is a form of permanent life insurance designed to remain in force for life as long as policy requirements are met and typically includes a cash value component.
Is life insurance expensive?
Life insurance costs vary based on factors such as age, health, coverage amount, policy type, and underwriting. Many people assume coverage will cost more than it actually does, which is why getting personalized quotes can be helpful.
Should I have life insurance if my employer already provides it?
Employer-sponsored coverage can be valuable, but it may not provide enough protection for your family's needs and may not remain with you if you leave your job. Reviewing both your workplace and individual coverage can help identify potential gaps.
Can I change my life insurance later?
Depending on your policy and circumstances, you may be able to purchase additional coverage or make certain changes. However, age and health can affect future eligibility and premiums, so it is helpful to review your needs before a major gap develops.
When should I review my life insurance policy?
Consider reviewing your coverage after major life events such as marriage, having a child, buying a home, changing jobs, starting a business, divorce, major income changes, or approaching retirement.
Make September the Month You Finally Review Your Life Insurance
Life Insurance Awareness Month is a reminder to take care of something that is easy to put off.
If someone depends on you financially, having the right life insurance can help provide financial protection when your family needs it most.
Already have a policy? September is a great time to make sure it still fits your life.
Do not have life insurance yet? You do not have to figure it out alone.
Daisy Nadolski helps individuals and families throughout Phoenix and surrounding Arizona communities understand their life insurance options and find coverage that fits their needs and budget.
Schedule your free consultation with Daisy today and take the first step toward protecting the people who matter most.
