(Washington, DC) Although consumers widely recognize the importance of life insurance in financially protecting their families, most need significant help in determining the type and amount of coverage appropriate at different life stages, according to the National Association of Insurance Commissioners (NAIC), of which the District of Columbia Department of Insurance, Securities and Banking (DISB) is a member. Acknowledging September as Life Insurance Awareness Month, DISB has used the information that NAIC has assembled about the subject on NAIC’s consumer education website,
Insure U.
“To help consumers make informed decisions about if and when to purchase, increase or reduce their life insurance at different life stages, DISB has launched Insure U in the District of Columbia,” said DISB Commissioner Thomas E. Hampton. “We’ve sent out life tips for young singles and young families, and for the rest of the month we’ll send out tips for established families and empty nesters.” Today, about 68 million Americans are without life insurance, according to Hampton, and those who do have, are often grossly underinsured, leaving their families financially vulnerable if a breadwinner suddenly passes away.
Hampton gave his remarks at a luncheon program that DISB co-hosted with three nonprofit associations—the District of Columbia Insurance Federation, the American Council of Life Insurers and the National Association of Insurance and Financial Advisors-Greater Washington, DC. The event, held on September 15, marked the second annual celebration of Life Insurance Awareness Month in the District as proclaimed by Mayor Anthony Williams. Highlights of the event included testimonies from people whose lives were impacted by life insurance and long-term care insurance, and the introduction of a free life insurance program for low-income families, LifeBridge.
NAIC conducted consumer research earlier this year, which showed some figures that are cause for concern:
- Only 35 percent of young singles have life insurance. Furthermore, few young singles (28 percent) express high levels of confidence in knowing the difference between the two basic types of life insurance, term and permanent, and a similar number (27 percent) are highly confident that buying life insurance when they are young will guarantee their coverage later in life.
- Among young families, nearly two-thirds (64 percent) believe it’s “very important” for both spouses to have life insurance. Yet fewer than half (48 percent) say they actually have purchased life insurance for either spouse.
- Across all life stages, a significant number of consumers (around 40 percent) fail to review their life insurance policies on an annual basis.