Economic Volatility Causing Many to Forgo Life Insurance

Stock market and other economic volatility combined with tightening family budgets are causing many American to consider canceling life insurance coverage. Some 27 percent of adult Americans surveyed said they would cancel their life insurance to save money if faced with an economic shortfall despite increased long term risk, according to a recent survey by the non-profit LIFE Foundation.

“Our survey shows that 75 percent of Americans with dependents are worried about how their family would manage financially should they die tomorrow. Canceling your life insurance policy would only increase the chances of such a fear becoming a reality,” said Marvin Feldman, president and chief executive officer of the LIFE Foundation. “With life insurance premiums more affordable than ever, the savings Americans will gain by dropping their coverage will never outweigh the financial devastation that would occur in the event of premature death.”

In addition to long-term risk, canceling a life insurance policy likely would increase rates if choosing to renew coverage later, and a medical exam might be required. Surrender charges also might apply depending on how long a life insurance policy has been in force before surrendering it.

Because life insurance premiums have decreased for a decade, the LIFE Foundation suggests shopping for lower-priced life insurance coverage before surrendering a current policy and losing life insurance protection. It’s also possible to review life insurance policies and adjust protection as life situation have changed. If a mortgage is paid off and children are out of college and on their own, eliminating coverage designed to pay for those will produce immediate savings without discontinuing life insurance.

Insurance-Website can help you determine if you are getting the best deal possible on your life insurance coverage. Our secure quote tool makes your local insurance professionals compete to offer you the best rates possible, and you are under no obligation to buy after getting your quotes.