Unemployment Rate indicates need for Life Insurance
Has unemployment made you wary of new investments? Are you struggling to keep up with monthly expenses, and have you stretched your budget way beyond its limits? In times like this, it is natural for people to prioritize their expenses, and more often than not, life insurance is one of the expenditures to get struck off the priority list. Yet, are we really doing the right thing?
Layoffs, unemployment and recession are actually indicators of a need to seriously reevaluate your life insurance needs, and purchase additional term life insurance if required. If you have no life insurance at all, this is the time you must consider purchasing a new policy. Things may be bad now financially, but think how the situation could get even worse for your family if you were no longer around. Left with unpaid loans and mortgages, monthly expenses, and no life insurance to soften the blow, they would be in dire financial distress even while grieving the death of a loved one.
According to life insurance experts, a rising unemployment rate and a recessionary economy are surefire signs that indicate the need for increased life insurance coverage. Sadly, most Americans are doing the opposite ' when money gets scarce, life insurance is one of the first expenditures that gets blown off the list.
Why should your need for individual term life insurance increase in tough economic times?
- Rising unemployment and rampant job insecurity:
The only life insurance most of us own is the one they are covered under in their work place. With unemployment on the rise, and no job security, you must know that the kind of life insurance you get through your work place is not portable. So if you lose your job, you are no longer covered and you need to purchase life insurance. Even if you have a very secure job, did you know that employers typically cover you for about 2 ' 3 times your current salary? This is barely enough. Life insurance coverage should ideally be around 10 to 15 times your current income. So even if you are guaranteed coverage due to a very secure job, you still need to fill the gap and cover yourself adequately. - Cuts in work benefits:
Employers want to cut back on costs heavily in times of recession. You can't blame them. They are going through a tough time too, possibly losing clients and trying their best to keep the business afloat. Employees have to be prepared for cuts in their retirement, pension and other benefits. If you received job-related perks, you will have to get used to doing without them too, or paying for expenses out of your own pocket. So all in all, you will face a huge cut in your benefits, while your expenses may go up. Holding an individual life insurance policy with adequate coverage is therefore imperative. - A drop in the value of your key assets:
Housing rates have crashed, and you have seen the value of one of your biggest assets sink. Other important investments, and possibly ones that you had banked on for the future have also taken a tumble. You have to rethink your financial plan, and fill the gaps. If you can't leave assets to your family, you can at least leave them a huge death benefit.
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