The High Cost of Low Coverage

More than 40% of U.S. households believe that either they need to buy life insurance or they need to increase their existing coverage. The average difference between the amount of coverage they think they need and what they actually own is about $200,000.¹

Why do people who know they are underinsured fail to address the shortfall? The decision to buy life insurance is imbued with complexities that go far beyond dollars and cents. Here are some common objections to purchasing life insurance. Do any of them sound familiar?

“It won't happen to my family.” It’s true that the U.S. death rate is fairly low. For people between the ages of 35 and 54, there are about 307 deaths per 100,000 people per year.² Nonetheless, you probably know of someone who died young and left dependent family members behind. It might not happen to your family, but what if it does?

“I can't afford any more insurance.” Regardless of the cost, you wouldn’t dream of going without auto, homeowners, and health insurance coverage. But the cost of your not carrying adequate life insurance could be far more expensive to surviving family members than the cost of the additional premiums.

“It’s too complicated. I don’t have time today.” There’s no doubt that buying life insurance takes some effort. In our busy world, it’s easy to find something else that seems more pressing. But as we get older, life insurance tends to become more expensive, and there is an increasing chance that health issues could complicate the purchase.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

The Buy Term and Invest the Difference philosophy encourages families to purchase affordable term life insurance. They can then have more money to invest in their family’s future.

Instead of cash value policies that bundle together investments and life insurance,  we believe in keeping investments and life insurance separate, so families can have a clear picture of where their financial future stands. Atlantic Funding Group believes in 100% term life insurance 100% of the time.

Today, an idea that once seemed revolutionary is now widely accepted as the standard for life insurance.

1) LIMRA, 2006
2) National Center for Health Statistics, 2006