ATLANTA â Most people do not like to think about their mortality, but in order to have a more secure financial future for their families, having a plan in place for the inevitable is essential. According to a recent AAA Consumer Pulse survey, just under one-third (32 percent) of Georgia residents do not have a life insurance policy.
âLife insurance is a crucial part of financial and insurance planning,â Michael Fletcher, assistant vice president of life insurance sales for AAA-The Auto Club Group, said. âMany people either donât have a policy or not enough coverage, and all it would take is one accident or terminal illness to leave your family in financial peril.â
Many people have preconceived notions about life insurance that may prevent them from obtaining important coverage. Some common misconceptions include:
Myth: Life insurance costs too much.
Fact: Many people tend to overestimate the cost of a life insurance policy. Georgians cite cost as the No. 1 reason they have not purchased a policy. In reality, a life insurance policy can be quite affordable. For instance, a 35-year-old woman in excellent health who has never used nicotine may get $100,000 of coverage for as little as $8 per month. Thatâs less than $1 a day.
Myth: You canât have multiple life insurance policies
Fact: You can have more than one life insurance policy. Someone with coverage through work, or a policy with a shorter term period, might decide to supplement it with additional coverage from another policy that can provide coverage for life. Employer coverage is often not portable. Over half (55 percent) of Georgia life insurance policyholders have insurance coverage through their employer. The majority (57 percent) of those individuals with employer coverage do not have another life insurance policy. Nearly half (46 percent) are concerned about losing their life insurance benefits if they lose their job.
Myth: I donât need life insurance; Iâm single.
Fact: There are many scenarios that make life insurance a good idea for single people. You may have aging parents who depend on you for their care (or will in the future). You may want to leave funds for a family member, such as a niece or nephew, or even make a financial contribution to an alma mater or a favorite charity. And some life insurance policies can have value other than a death benefit. Universal Life insurance, for example, can grow cash value over time, and loans can be taken out for emergencies on the value of the policy at a fixed rate (just make sure to pay it back).
Myth: I canât get life insurance because Iâm over age 65.
Fact: There are many types of policies, such as Whole Life insurance available to individuals over age 65, that can play an important role in the handling of final expenses, which might otherwise burden a surviving spouse or other family members. The sooner you take action to obtain a policy, you will receive more coverage choices and more attractive premiums.
âThese are just a few of the common misconceptions some have about life insurance. The best thing you can do is talk with your life insurance agent about the right coverage for you,â Garrett Townsend, the Georgia public affairs director for AAA, said.
Of those Georgia residents who have a life insurance policy, nearly half (47 percent) have a policy valued between 1-3 times their annual salary. Selecting the amount of coverage you need will vary greatly from person to person.
The AAA Consumer Pulse Survey was conducted online among residents living in Georgia from Feb. 7-19, 2018. A total of 400 residents completed the survey, with 273 residents with a life insurance policy. Results have a margin of error of around plus or minus 6.3 percentage points. Responses are weighted by gender and age to ensure reliable and accurate representation of the adult population (18-plus) in Georgia.