In America, there is only 57% of Americans that have life insurance coverage. The average American has $168,000 in life Insurance Coverage. The most common age group for people to buy insurance is between 35 and 45. Now let’s compare this to cell phones. The vast majority of Americans have cell phones. Approximately 97% now own a cell phone of some kind almost every user has insurance on their phone just in case something happens to it. But guess what, every one of us is going to expire, that’s 100% guaranteed. But Americans will add $8.00 to $12.00 on their smartphones and tablets just in case something happens to it.
Insurance is required to drive a vehicle and if caught without insurance there are tickets, sines and in some cases, it may lead to arrest. So why isn’t Americas prioritizing and/or maintaining Life Insurance Policies? I don’t know the answer. I agree that insurance on automobiles, houses, health, and even smartphones make sense. But 43% of Americans do not align with my reasoning because again, only 57% of people have life insurance.
It just seems like it’s at the bottom of the ladder when it should be at the top. One way of looking at it is through wealth accumulation by passing on assets to future generations.
Life insurance is a popular way for the wealthy to maximize their after-tax estate and have more to pass on to their heirs. A life insurance policy can be used as an investment tool or simply provide added reassurance. Here are 4 key takeaways for life insurance.
- Life insurance can be a useful financial tool for business owners or individuals with a higher net worth as well as for people who may not have accumulated as many assets.
- It’s possible to purchase more than one life insurance policy to meet different financial needs though this can mean submitting to multiple paramedical exams during underwriting.
- Life insurance policies are not counted as part of an estate and are not taxed by the federal government, which may appeal to individuals who are hoping to minimize estate taxes.
- A life insurance policy can be sold for its cash value or you can borrow against its accumulated cash value during your lifetime.
Life Insurance as an Asset
Life insurance is more than a death benefit. Depending upon the type of insurance, it may have a cash value or intrinsic value. Cash value accumulation is a feature of certain types of permanent life insurance, which offers lifetime coverage. Thus, when the insurance is no longer needed, it can be sold as a life settlement.