Why Do I Need Insurance?
There’s an analogy that is shared with the advisors and agents in our office: If you had a tree in your backyard that grew money, you would want to insure it, right? Insurance on yourself and family is the same way – it will protect your and your family’s future earnings power. This coverage protects your family’s financial future in case of an unpredictable event, thereby giving you and your family peace of mind in case the unexpected were to happen. Often, because of the busyness of our life, insurance gets put on the back burner of “I’ll get to it later” and “I don’t have time.” Here are some amazing, yet real, insurance statistics that should get you off the back burner if you are stuck there:
- Life insurance stat – 7 out of 10 households will have a hard time paying the bills within months after a breadwinner dies (LIMRA, 2016 Facts if Life)
- Disability insurance stat – 1 out of 3 individuals between the ages of 35 and 65 will be disabled more than 90 days (statistics, ssa.gov), and this disability could more than likely be caused by an illness rather than an accident (Council for Disability Awareness, Long-Term Disability Claims Review, 2011)
- Critical illness stat – about 1.4 million Americans are diagnosed with cancer each year; every 40 seconds, someone in the US will have a stroke; every 34 seconds, someone in the US will have a heart attack; about 1.5 million Americans declare bankruptcy each year, of which 60% are due to medical bills (Life Happens, Critical Illness Insurance – What you need to know 8/26/15)
- Accident stat – 1 out of 8 people had an unexpected, non-fatal injury requiring medical attention. These injuries, on average, cost households $6,700 per accident (National Safety Council Injury Facts 2015 Edition)
- Long-term care stat – 7 out of 10 individuals turning age 65 will need some type of long-term care during their remaining lifetime (US Department of HHS, Who Needs Care?)
- Business owner stat – The small business administration has identified that death or disability of a business owner or key employee could lead to the business failing (SBA, Risk Management for a small business)
As you can imagine, becoming injured, becoming disabled, or dying prematurely – without insurance protection – can leave a burden on you and your family’s life. Do you really want that to happen? Another stat – most people misprice the cost of insurance. For example, in its 2014 Insurance Barometer Study, LIMRA stated that individuals without life insurance coverage overestimate its cost by 3X the actual cost. Those with coverage, overestimated it by 2X.
If insurance still seems abstract to you, think of it as a tow truck or spare tire on your car – except on your life, family’s life, or business. We don’t expect to get a flat tire or have engine trouble on our road journey, but the spare tire or tow truck is there in case the unexpected happens and can get us back on the road. Insurance is the same concept – it will keep your family and your family goals intact in case of the unexpected. That is why it pays to address those needs now; you never know when the unexpected will happen.
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