(StatePoint) The COVID-19 pandemic disrupted nearly every aspect of people’s lives and, as it turns out, it also impacted their feelings about financial security and life insurance. In a national survey commissioned by Erie Insurance:
• Two-thirds of respondents (66%) said the pandemic made them more concerned about their financial security than they were before.
• Sixty-one percent said the pandemic made them more concerned about how their family would be taken care of financially if they became seriously ill or worse and could no longer provide for them.
• Half (49%) said the pandemic made them question whether they had the right type and amount of life insurance as part of their overall plan for financial security, and a quarter (25%) contacted their insurance agent about it.
If you’re among those who want to make sure your family is taken care of in the event something unexpected happens to you, but you aren’t sure where to start, here are three questions to ask your insurance agent:
1. How do I know whether I need life insurance? If you have family members or loved ones who depend on your income, it is a good idea to have life insurance to ensure they will be taken care of. The mortgage on your house, your child’s college tuition, car loans, and funds for your final expenses are just a few things that can be paid for with money from your life insurance policy. Even if no one depends on your income, it still may make sense to get a life insurance policy to cover your final expenses and debts — including student loans.
2. How do I figure out how much life insurance to get? There are several factors to consider, including the needs of the people you want to protect and how long they will need financial support. Consider your income, or if you aren’t employed outside the home, what it would cost if those left behind would have to pay for services you currently provide, such as childcare or home maintenance.
3. Which is better, term life insurance or whole life? It depends on where you are. Term life insurance protects you for a specific amount of time. An example would be while you are still paying off a mortgage or paying off your child’s college tuition. Whole life insurance accumulates cash value and allows for your loved ones to be covered throughout your lifetime.
Something else to take into account as you’re considering purchasing life insurance is the value it provides, even if you never actually need to use it. “One of the best reasons to get life insurance is that it sets your mind at ease to know that your loved ones will be taken care of,” said Louis Colaizzo, senior vice president of Erie Family Life, Erie Insurance. “In fact, 44% of those who responded to our survey said the pandemic made them appreciate the peace of mind they get from having life insurance even more now than they did before.”
To learn more about life insurance, contact your agent or visit erieinsurance.com/life-insurance.
Amid the uncertainty created by the pandemic, consider channeling your concerns into action by creating a financial safety net for your loved ones.
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