Over the past several years, one of the biggest issues life insurance providers have encountered as they tried to grow their base of policyholders is that many people are reluctant to buy coverage simply because they don't understand it. That issue reveals itself in terms of people consistently overestimating life insurance costs and generally being unaware of the wide variety of life products now available.
Experts therefore believe a little education can go a long way here, but say it may be up to employers to help people get to know the industry and its offerings a little better. For instance, nearly 1 in 3 people find information about life insurance options available to them on their own, and 22 percent learn about the coverage by talking to family members, according to Lincoln Financial Group. Only 13 percent get such information from their employers and 9 percent consult a financial planner.
Meanwhile, 9 in 10 respondents said they felt life insurance brought with it more financial security, but more than 2 in 5 said they don't know much about it, the study found.
Getting over the issues
With these problems in mind, it might be important for entities other than consumers themselves to push life insurance education efforts going forward. This may be done on a number of fronts, according to TG Daily. First, there's understanding why life insurance is important, and the many ways in which it can insulate a policyholder's loved ones from financial concerns in the event of a death, expected or not. After that, it's important for people to know what constitutes the "right" amount of coverage, both to ensure they can take care of all their potential needs, but also not so much that they're spending beyond their means to cover the cost.
Tied into that cost is finding the right kind of life insurance policy, whether that's term or whole life, because most people may not feel they need or can afford the far more expensive coverage the latter provides.
When to consider it
Generally speaking, people understand that life insurance is a good idea when they have kids, but experts advise it can also be vital at other major life events, according to certified financial planner Marc Hebert, writing for New Hampshire television station WMUR. Milestones such as getting married or buying a home are also important times to buy life insurance because of how much protection it can provide to loved ones.
It can also be a major issue for anyone who owns their own business, Hebert noted. There are actually multiple practical applications for life coverage for small business owners, and investigating the options is a good idea for such entrepreneurs.
Generally speaking, the more businesses - including life insurers themselves - can do to boost consumers' understanding of life coverage, the better off those people will be when it comes to making the right financial decisions needed at various junctures in their lives.