We’ve all had “recession” on our minds for some time now, but are we feeling it? Surely pressures have been felt with inflation surging, but the debate rages on over whether or not the U.S. economy is presently in or headed towards a recession.
The common definition of recession identifies itself as two consecutive quarters of negative gross domestic product (GDP). This happened in the first half of 2022.
Countering this though is the view taken by the National Bureau of Economic Research, the organization that defines U.S. business cycles.
The NBER defines a recession as a significant decline in the activity spread across the economy, lasting several months. According to this, we were not in a recession in 2022 and we still aren’t today.
Regardless of which economic definition you may believe is most accurate, we can all agree that the current economic times have felt uneasy. That’s why it’s so crucial to be prepared and have peace of mind for your finances and the future of your loved ones.
As you continue to navigate the uncertainty of the economy, be sure to consider the great benefits that come with having a life insurance policy.
Don’t Sacrifice Tomorrow For Today
Early pandemic concerns led to a significant surge in life insurance sales. In 2020 and 2021, many insurance companies saw record growth.
According to a recent report from LIMRA, that trend may now be reversing, for both whole life and term life insurance.
The report indicates a 9% dip in the total number of all types of life insurance policies sold from the second quarter of 2021 to the same time this year. Term life insurance policy sales are down 9%, while whole life insurance policy sales dropped by 12%.
What seems to be the main reason for this drop? John Carroll, a LIMRA representative, suggested that inflation has people worried. As more people try to save for immediate expenses, future investments and insurance policies such as life insurance aren’t making the cut.
Inflation troubles can quickly turn for the worse if you are left without coverage. Even as consumer budgets are stretched thin, a financial safety net is crucial.
Insufficient Coverage Creates More Hardship
Simply having some life insurance is obviously better than none at all, but there is an ongoing issue of Americans not having a sufficient amount of life insurance coverage to adequately protect their family.
More than 100 million Americans don’t have enough life insurance, according to the 2022 Insurance Barometer Study conducted by LIMRA and Life Happens, two nonprofit industry-funded groups.
Why don’t Americans have enough life insurance? Here are some revealing statistics from the study:
- 54% don’t purchase because they don’t know what type or how much insurance to buy.
- More than half of consumers think the cost of coverage is higher than it actually is.
- One in four consumers believe their employer-based life insurance offers sufficient coverage, even though the average policy offers the equivalent of one year’s worth of salary.
A lack of adequate coverage can lead to a significant financial hardship for families, especially households that rely on dual incomes. Most families of this model would struggle after 6 months, while some may suffer as soon as one month after losing one income source.
Term Life Policies Can Help Relieve Financial Hardship
The best type of life insurance for you is the one that fits your budget, goals, and needs of beneficiaries. While many still equate the phrase “life insurance” with a whole life policy, the truth is term life policies are more popular than ever.
If your goal is to cover your loved ones for a specific period of time, like while you pay down a mortgage or raise children, a term life insurance policy is usually the best option. This is particularly true if you’re on a budget, as term life insurance policies are more affordable than permanent policies.
Term life insurance allows folks to buy the term life insurance policy that best suits their current financial needs and invest the difference in your separate retirement plans . Even if the investment is small for the first couple of years of the term, this affords flexibility to use that money immediately or continue to save.
Life Insurance Should Never Be A Cut Cost
Even in the most volatile of economic times, life insurance should never be a cut cost. Prioritize the protection that comes with a term life insurance policy.
If the unexpected were to happen, would your family be able to afford to maintain their current lifestyle without the assistance of your life insurance policy? Would they be able to bear the financial burden of your final arrangements amid increasing costs and fees? These are just a couple of the things to consider as you make budget decisions. Is sacrificing your peace of mind really a smart choice?
In addition to simply not knowing just how much a policy costs, many are easy to write off life insurance as a pricy, long-term expense. But younger people actually have an advantage in purchasing a term policy earlier in life to keep premiums down.
In most cases, 2 trips through a drive through carries a heavier hit to your wallet than a 10 year term for a 30 or 40 year old. We’re not saying you can’t treat yourself still, but consider that price tag in your overall financial forecasting. It’s really not that significant.
At the end of the day, you need a better understanding of the costs and the impact a policy will have on your family’s future. The experts at Low Cost Life Insurance are your guides; working for your family’s benefit and financial stability.
We’re always available to discuss your options: (877) 794-8376 (TERM)