More Americans Foregoing Life Insurance

[Liberal_in_LA]

Posted August 31, 2010
By Matt Brownell
More than ever, budget-conscious American households are choosing to go without life insurance, a new study reports.

Market research firm Limra found that nearly a third of American households do not have any form of life insurance. That’s the highest rate in over forty years, and reflects a sharp downward trend in coverage over the latter part of the last decade.

As the timing of the drop would indicate, economic woes played a large role in the decline in coverage, with half of those surveyed indicating that they needed more life insurance but could not afford it. Still, those choosing to cut life insurance from their budget are playing a dangerous game: 40% of households with children under the age of 18 said that they would immediately have difficulty making ends meet if a primary wage earner died.

This willingness to forego coverage is sometimes rooted in the mistaken belief that the government will provide some form of monetary support. “People think, ‘well, there must be some government program that will kick in,’” says Amy Danise, Senior Managing Editor of Insure.com. “But Social Security is not going to provide the kind of income replacement that a life insurance policy would.”

Danise goes on to note that going without life insurance for a period of time is especially problematic due to the risk that you’ll be diagnosed with a condition that makes subsequent coverage prohibitively expensive. “You can so easily become uninsurable,” she says. “Even buying some cheap term insurance for five or ten years is a smart thing to do.”

http://www.mainstreet.com/article/moneyinvesting/insurance/more-americans-foregoing-life-insurance?cm_ven=msnetzero

[Lost4words]

1. if I had a damn job! cant buy much with nothing!

just had to cancel my life ins.

[slackmaster]

2. As a divorced empty-nester with no dependents, I have no need for life insurance

It would be pointless.

[SoCalDem]

5. well..someone will have to make ( & pay for) your "final resting place arrangements"

It would be decent of you to provide a little money for that expense:)

[slackmaster]

12. I have plenty of assets to cover that, and much more

It's not going to be a problem, but I feel sorry for the people who have to deal with getting rid of all my stuff.

[niyad]

6. exact;ly--and, because of that, there is NO WAY I would give those greedy bastards one cent of my

few cents.

[avaistheone1]

3. Doctors are seeing a lot more people forgoing cancer treatment because people simply can't afford it

[SoCalDem]

4. It's hard to find the money for insurance if you wonder how you will pay the rent

& buy food:(

Life insurance is a luxury for many people. and it;s especially tough for people who are past 40 and then become unemployed. Even when they find a new job, their "new" insurance comes at a higher price when that new physical reveals health issues....so they often "just say no".

[T Wolf]

7. Never really saw the upside to life insurance, unless you were lucky enough to die prematurely.

If you lead a full (length) life, all you have done is lend money to the insurance company at a very low interest rate.

Gambling against yourself just seems stupid.

You die early and celebrate because the long-shot came in?

You live long and regret losing that bet?

Considering that many policies exist to cover funeral expenses (now that is throwing money down a well), it seems especially misguided.

[Winterblues]

9. It is always your money and you can use it at any time.

You can get a very low loan on your policy at any time and either pay it back or reuce you payout amount by that much..It is like putting your money in a piggy bank..with top reward for early withdrawal.

[TBF]

11. That is the type we have -

at least on my husband. He is the sole earner now & we've got a good-sized policy on him that we can borrow against, and would help me in the transition if anything were to happen to him. We made the mistake of not buying mine at the same time, and now I've been diagnosed with arthritis. We still may buy it, but it will be much more. Since we're mostly protecting against losing his income though it's not a priority. We only bought it after we had children, never even thought about it before that time.

[slackmaster]

13. My mom took out a Whole Life policy on me when I was born

I cashed it in when I got divorced.

[ChairmanAgnostic]

8. life insurance is a scam.

Actuarial tables are damned good at predicting just how much profit they can SQUEEZE out of you, before you kick d'bucket.

There is only one beneficiary in the life insurance scam. The insurer.

[napi21]

10. Neither my husband now I have EVER bought life ins. We're now

68/67 yo and I've made arrangements to donate my body to the local med school & my hubby wants to be cremated & we have the small mount of $$ that costs to pay for it.

[SheilaT]

14. As the article points out,

most of those with children under the age of 18 would have a very hard time making ends meet if the primary wage earner dies.

Those of you who live alone and have you young dependents, all you need is the money to bury/cremate you, or will your body to a medical school.

When our kids were young my husband carried term insurance. No policy on me. I was a stay-at-home Mom, although if I'd died, replacing what I didn't wouldn't have been free. Now I'm divorced, the two boys are grown, and I've seen to it that when I die, they can immediately access the money needed to cremate me. And have a nice party.