I was intrigued by this research from the LIMRA on the perceived costs of life insurance. Do you think life insurance is more expensive than it might really be?
Survey respondents were asked to estimate the annual cost of a 20-year, $250,000, level-term life policy for a healthy 30-year old consumer. The actual cost is roughly $150, but Americans estimate the cost at $400. Younger adults, who are most likely to qualify for preferred pricing, overestimate the cost by nearly seven times the actual cost.
According to the 2012 Insurance Barometer Study, nearly a third of all consumers believe they need more life insurance, including 20 percent of current policyholders and about half of those who do not have any coverage. Yet one of the top reasons consumers cite for not obtaining more is that the product is “too expensive” (83 percent), second only to those who say they haven’t purchased more because they have “other financial priorities” (85 percent).
Life insurance is something we always tend to “put off for later.” I got a wake up call last year when my 18 year old son had a serious medical issue with one of his lungs. Before the issue, his cost would have been very low for any type of life policy. Now, after the issue, not so inexpensive.
Also,the economy is impacting coverage people may have had through an employer. If you have changed jobs, or gone out on your own, have you reviewed the impact to your life insurance?