Most people do not like to think about their mortality, but in order to have a more secure financial future for your family, having a plan in place for the inevitable is essential.
According to a recent AAA Consumer Pulse™ survey, nearly half (40%) of Minnesota residents do not have a life insurance policy.
“Life insurance is a crucial part of financial and insurance planning,” said Michael Fletcher, Assistant Vice-President of Life Insurance Sales for AAA – The Auto Club Group. “Many people either don’t 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.”
Many people have preconceived notions about life insurance which 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. Minnesota residents cite cost as the number one 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.* That's less than $1 a day.
Myth: You can’t 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. More than half (58%) of Minnesota life insurance policyholders have coverage through their employer. The majority (57%) of those individuals with employer coverage do not have another life insurance policy and nearly one-third (30%) are concerned about losing their life insurance benefits if they lose their job.
Myth: I don’t need life insurance; I’m 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 can’t get life insurance because I’m 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.
“These 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,” said Nick Jarmusz, Public Affairs Director for AAA - The Auto Club Group.
Of those Minnesota residents who have a life insurance policy, half (53%) 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. AAA Life Insurance Company offers planning tools such as the Life Insurance Needs Calculator, to help calculate items to consider when looking for a policy, such as final expenses, debt, and replacement income.
For more information on AAA Life Insurance products, talk to a AAA Life Insurance Specialist at your local AAA branch or visit AAA.com/life.
AAA Consumer Pulse™ Survey
The AAA Consumer Pulse™ Survey was conducted online among residents living in Minnesota from February 7, 2018 – February 19, 2018. A total of 401 residents completed the survey, with 239 residents with a life insurance policy. Results have a margin of error of ± 6.3 percentage points. Responses are weighted by gender and age to ensure reliable and accurate representation of the adult population (18+) in Minnesota.
About The Auto Club Group
The Auto Club Group (ACG) is the second largest AAA club in North America. ACG and its affiliates provide membership, insurance, financial services and travel offerings to over 9.6 million members across eleven states and two U.S. territories including Florida, Georgia, Iowa, Michigan, Nebraska, North Dakota, Tennessee, Wisconsin, Puerto Rico and the U.S. Virgin Islands; most of Illinois and Minnesota; and a portion of Indiana. ACG belongs to the national AAA federation with more than 59 million members in the United States and Canada and whose mission includes protecting and advancing freedom of mobility and improving traffic safety. Motorists can map a route, identify gas prices, find discounts, book a hotel, and access AAA roadside assistance with the AAA Mobile app for iPhone, iPad and Android. Learn more at AAA.com/mobile. AAA clubs can be visited on the Internet at AAA.com.
About AAA Life Insurance Company
Life insurance and annuities are issued by AAA Life Insurance Company, Livonia, MI. AAA Life Insurance Company is licensed in all states except NY. CA Cert of Authority #07861. Product availability and features may vary by state. AAA Life Insurance products are not available outside the United States. Visit aaalife.com for eligibility requirements and restrictions.