Life Insurance Awareness Month: The Importance of Life Insurance for Business Owners and Society
Industry reports indicate that upwards of 40% of all American adults have no life insurance whatsoever and that the average death benefit of those who do have life insurance would only cover three years of their own income. This of course is not sufficient for most people. That is why over a hundred major insurers, industry groups, and others have designated September “Life Insurance Awareness Month”.
What Can Life Insurance Do For Your Business? Life insurance is about responsibly protecting your business from the unexpected death of one or more of the people that make it successful. Here are some examples of how this worst case scenario can play out:
- Key Employee Insurance provides your business with the means to seek out and train someone to replace your number one seller or any other employee that pulls more than their weight in helping your company generate revenue.
- Buy-Sell Agreement Backed by Life Insurance is useful for a partnership or private corporation. Essentially, the business pays for life insurance on each of its owners. This is done with the understanding that if any of the partners dies, the proceeds from the life insurance will be used for the others to purchase the deceased’s share(s) of the company. This prevents the business from suddenly falling into the hands of the deceased’s estate, descendants, or others who are not involved in the day-to-day operation of the business.
- Loan Coverage Insurance is life insurance purchased with the specific purpose of protecting your company from debts incurred. For example, if you take out a sizeable business loan with your home or other assets as collateral and then pass away, you do not want to leave your family saddled with the obligation to sell your assets at a loss to cover your business debt. Life insurance written expressly for covering this loan can protect your loved ones from that eventuality.
What Does Life Insurance Do For Our Society?
Life insurance does not just benefit individuals. It also benefits our society as a whole and in a number of ways. On the private side, the companies that underwrite the policies make profits and they employ a startling amount of people (from case workers to underwriters to private investigators to agents) roughly 2.5 million jobs in total. On the public side, the security of having a life insurance policy is second only to the relief of having the insurance proceeds available in the event of a worst-case scenario.
Finally, life insurance provides an enormous amount of economic stimulus to Americans on a daily basis. Consider that each day, Social Security pays out nearly $2 billion in benefits to Americans. Life insurers pay out just over $1.5 billion. This makes life insurance comparable to Social Security in terms of the amount of financial benefits it provides its policyholders. This money not only helps boost the economy, it also provides necessary relief to help families move forward after the loss of a loved one.