COLUMBUS — September is Life Insurance Awareness Month, and Ohio Department of Insurance Director Judith L. French is urging Ohioans to evaluate life insurance as part of family financial planning, especially the financial impact of losing a primary wage earner. Nearly half of American households would encounter significant financial difficulties within six months and more than a quarter would reach this point in only one month.
“Life insurance can play an important role in a family’s financial plan and financial security, but it should be carefully evaluated with the assistance of an insurance agent,” said French, who is also Chair of the National Association of Insurance Commissioners Life Insurance and Annuities Committee. “An agent can explain the different coverage options, adequate amounts of coverage, and the cost, making what can be a complicated purchase much less intimidating. In addition, educational life insurance information is available from the Ohio Department of Insurance, and our representatives are available to answer any questions.”
Life insurance can pay for burial and other end-of-life expenses and much more, including supplementing the lost income from the death of a primary wage earner and transferring wealth from one generation to the next.
How does life insurance provide financial security?
Life insurance policy proceeds can help temporarily replace a primary wage earner’s income, fund ongoing expenses, and pay other debts left behind.
What is an appropriate amount of life insurance?
The amount of life insurance a person should purchase depends on unique factors such as their family situation and financial standing, including how much a person can afford to pay for it. An insurance agent can help determine a suitable amount. Simply having a policy doesn’t necessarily equate to adequate coverage.
Are there different types of life insurance products?
Life insurance falls into two product classes: term and cash value. Term insurance provides lower-cost coverage for a specific time, such as 5, 10, and 20 years. Cash value insurance — whole, universal, and variable — often spans a lifetime and includes savings and investment features.
Products with different benefits are available for different types of wage earners, and some policies may allow for flexible premium contribution amounts. In addition, some premium amounts may increase after a certain amount of time that the coverage is active.
How often should I review my life insurance coverage?
Circumstances associated with marriage, children, loans, employment, and retirement are reasons to increase or decrease benefits, adjust policy features, and review the beneficiaries of the policy. Remember to review the policy’s annual statement to verify the policy is performing as expected and address any concerns with an insurance agent.
Where can I get life insurance information and assistance?
Educational life insurance information is available from the Ohio Department of Insurance at insurance.ohio.gov and the National Association of Insurance Commissioners at naic.org. Call 800-686-1526 and email consumer.services@insurance.ohio.gov to reach department representatives with your life insurance questions and/or concerns.
A free, online missing life insurance policy search service is available to help Ohioans who believe they may be the beneficiary of unclaimed proceeds, through the National Association of Insurance Commissioners at https://eapps.naic.org/life-policy-locator.