COLUMBUS — Life insurance might not be the most pleasant topic to address but it is undoubtedly an important one that should not be ignored. Governor John R. Kasich and Lt. Governor and Department of Insurance Director Mary Taylor are bringing the topic to the forefront, having declared September as Life Insurance Awareness Month in Ohio through a resolution.
A recent national study found that one in four Americans say they need more life insurance, but only 10 percent are very likely to purchase a policy within the next year. The troubling part is that many believe they would feel the financial impact from the loss of a primary wage earner within six months.
Kasich and Taylor are stressing to Ohioans the importance of taking steps to financially protect their loved ones if an unfortunate life event were to occur.
“Life insurance should be a central piece of a family’s financial planning,” Taylor said. “A good starting point is to determine how much life insurance is needed, for how long and what you can afford to pay.”
In the event of a tragedy, life insurance proceeds can replace a deceased person’s income, pay the mortgage and other loans, and help pay college tuition. Life insurance serves as a monetary support system typically for those designated as beneficiaries. Many employers provide life insurance and it can also be purchased through an insurance agent.
The Ohio Department of Insurance offers these important life-insurance life-stage considerations:
Young Singles: While buying a policy early in your life will provide lower costs and potentially guarantee your insurability, some believe the need for life insurance at a young age typically without dependents may not be necessary. You should consider your options and make a choice based on your finances, health and other circumstances.
Young Families: Having children is often the catalyst for buying life insurance. When securing coverage, consider covering both spouses – even if one stays at home and is not employed. In the event of the stay-at-home parent’s death, the surviving spouse will need to shoulder all the responsibilities of the household.
Established Families: Remember to periodically review and update your coverage to reflect changes in your financial situation and family composition. One strategy to keep costs down for a growing family may be to take a look at term life insurance, which offers financial protection for a specified time period.
Seniors and Baby Boomers: Now is a good time to re-evaluate your life insurance to determine whether you still need as much coverage when you had a younger family and larger mortgage principle. If you are covered through your job and are planning to retire soon, inquire about converting it to an individual policy.
Single Parents: If you and your ex-spouse have life insurance policies, adjust the beneficiaries to reflect the changes you both want after the divorce is final. Review your policy, will and retirement accounts to make sure they all indicate the correct beneficiaries. If your spouse will be paying for child support, consider requiring that he/she purchase a policy covering the term of the payment and be named as the policy owner and beneficiary.
Military: Check your policy renewal date and payment terms with your agent to ensure your coverage will remain in effect during deployment. If necessary, you may be able to renew a policy early or have your premiums paid by automated bank draft. Some insurance companies might also allow you to suspend certain coverage while you are deployed.
Raising Grandchildren: Leaving a life insurance benefit directly to a minor child is generally not a good idea. Make sure the policy names a contingent beneficiary or a trustee who will act as a beneficiary on behalf of the child. Otherwise the life insurance benefit may not be accessible to the child until the issue is processed through court. You may want to set up a family trust with your selected trustee in charge.
Ohioans with insurance questions can call the Department’s consumer hotline at 800-686-1526. A life insurance consumer guide and a listing of licensed agents are available at www.insurance.ohio.gov. You can follow the Department on Facebook and Twitter (@OHInsurance).