Life insurance often neglected

NAIC is an organization of state insurance regulators. It has conducted a survey related to life insurance in the US. Its findings are, only 35 percent of young singles have life insurance, and just 28 percent know exactly the difference between the two basic types--term and permanent.

NAIC president, Alessandro Iuppa, says that the requirement of life insurance is known to many adults who have dependent children at home. They know it is an option to protect their families. Yet not all have life insurance.

Alessandro added that a few young singles do not have it. They even take time to evaluate their options. The survey results are indicative that only 40 percent of Americans who have life insurance actually take time to review their policies every year.

NAIC has gone online with www.insureuonline.org to help consumers.

The various steps outlined in the website to help consumers make decision on buying insurance and when to plan on buying it or increasing/reducing at different stages in life.

Some of the other steps include considering financial dependents and the major expenses you can be on people who depend on you. Evaluate what it is likely to be and also see if you are going to leave them in substantial debts or other monetary concerns like taxes to pay on your estate.

Have a look at the two main types of life insurance, term and permanent and the benefits you can derive from them. Like term life insurance pays a death benefit if you die within a specified period or term. Permanent life insurance, such as whole life, universal life and variable life, includes a death benefit and gives you the ability to build up cash value.

Young singles who know that they can get whole life insurance later on can consider a term policy that is guaranteed to be renewable. A conversion option policy could also be considered thus enabling them to switch to a cash-value policy.

Catherine Weatherford, chief executive of NAIC, advises a check on policies to reflect any major changes in our lives, such as marriage, the birth of a child, divorce or the death of a spouse. This check should be done before paying the renewal premium. Families also need to consider the probable costs of their children's college education when determining how much life insurance they need. Seniors should evaluate if they can reduce their coverage based on factors like the death of a spouse or home loan is paid off or even financial independence of their children and/or grandchildren.

Young singles with no dependents, feel less need for life insurance. Considering it could obtain lower rates for a policy later on, without the worry of qualifying medically.

The last thing consumers need to do is run a check with their state insurance department to make sure the company offering a policy is legitimate, solvent and authorized to do business in their state.