Like it or not, life is a temporary affair for all of us. That simple fact puts the concept of life insurance in a special position within the realm of insurance. Unlike car insurance to protect yourself from risk in the hypothetical event of an accident, life insurance protects your family from financial risk related to an absolute inevitability: your passing.

In our view, no case for life insurance is more compelling than that — life insurance is an insurance policy you know will pay out, although you can’t know when. 

Despite this, it seems many people remain unconvinced of the value of life insurance. Only 54% of Americans were protected by a life insurance policy in 2020. Below, the Wallace & Turner team has put together this article to explain why life insurance is one of the best investments you can make for your family.

By the Numbers: Why You Need Life Insurance

Why purchase life insurance? If you have a head for numbers, it won’t take long to convince you. 

Life Insurance Cost vs. Benefits

The most common amount of coverage sold for term life policies is $500,000. And the average monthly premium for a 40-year-old buying that much coverage over a 20-year term is $27. At that price, the maximum you would pay in premiums is $6,480 over the 20-year term. 

And the possible payout to your beneficiaries if you die during the term? Half a million dollars.

Meanwhile, 52% of Americans who haven’t purchased life insurance say they haven’t done so because they think it is too expensive. While premiums vary based on a wide variety of factors, it’s hard to argue with even a highly skeptical cost-benefit analysis of life insurance.

Lost Income and Its Impact on Your Household

According to the Bureau of Labor Statistics, the average mean salary for all occupations in the United States is $58,260. Yours may be higher or lower, but consider this question: Can your household afford to lose your income? Because that’s exactly what will happen if you pass away.

It’s a hard truth, but it’s one that’s supported by real data: Your household’s income will almost certainly decrease upon your death. According to data from the Federal Reserve Bank of Chicago, the average household income in the U.S. over the three years before the death of a spouse is around $75,000. But it falls to $47,000 in the three years after the spouse passes away. That figure accounts for all kinds of mitigating factors and circumstances except one major consideration: life insurance.

A $500,000 term life insurance payout buys your family time — time to grieve and time to adjust to their new financial reality. It gives them breathing room, and they deserve that. 

Covering the Costs of Dying

You might get so wrapped up in thinking about the impact of a long-term loss of income that you forget the immediate impact of your passing:

• Medical bills

• Funeral costs

• Burial expenses

On average, the final month of care for a person who dies in a hospital costs $32,379, according to a 2016 study. Meanwhile, the average cost of a funeral, coffin and burial for an American adult in 2021 was $9,420, according to the National Funeral Directors Association.

That’s nearly $43,000 in average costs just tied to your passing. Even if your family has that kind of money on hand, can they afford to part with it in the wake of your death? For most families, the answer is probably not. But this is yet another case where life insurance comes in and saves the financial day.

Life Insurance Policies Meet You Where You Are

Is life insurance worth it? By and large, the numbers do the talking, and they say, quite emphatically, yes — life insurance is worth it. But examining life insurance as just one thing with one price and one structure and leaving it at that is a mistake. 

That’s because there are countless types of life insurance policies, and a dedicated independent insurance agent can pair you with the one that’s perfect for your income, age, circumstances and desires.

Here are just a few examples of the types of life insurance that might suit your current situation:

• Term life insurance. With term life, you pay your premium for a specific number of years. If you die within that term, the policy pays out. 

• Group life insurance. This is life insurance you typically get through your employer. It can work a few different ways, but usually, your employer will cover part of the premium.

• Whole life insurance. This type of policy covers you as long as you pay your premiums, rather than for a specific term. 

• Universal life insurance. Universal life insurance is similar to whole life insurance, but it often adds a component that allows you to save money through the policy with tax benefits.

• Variable life insurance. This type of insurance can vary in value over its life, often depending on factors related to the underlying investments that support the policy.

• Guaranteed issue life insurance. This is a type of life insurance you can get without having to have a health exam or answer health-related questions.

• Simplified issue life insurance. With simplified issue life insurance, you don’t have to have a health exam, but you may have to answer some health questions to get a policy.

Within each of those types of life insurance, you will find various price points and levers you can adjust — with your insurance agent’s help — to make your life insurance policy truly work for you.

Looking for Life Insurance? 

If you’re interested in protecting your loved ones’ financial stability after you die, life insurance is as close to being a must-have policy as insurance can get. But once you decide you need life insurance, where should you look? There are dozens of insurance agencies right here in Ohio, and they all say they can connect you with the best life insurance policies, but no one has been in business longer than Wallace & Turner.

Our Ohio insurance agency is locally owned, independent and established — we’ve been serving Urbana and Springfield, Ohio’s insurance needs since 1870.

When you’re talking about life insurance, you need the long view, and we have more than 150 years of perspective to offer you. Ready to learn more and find the perfect life insurance policy? Contact us at 937-324-8492, email info@wtins.com or reach out online.