This September marks Life Insurance Awareness Month 2024 and, whether it’s a simple umbrella, a sturdy helmet, or the crumple zones of a car, having protection is always nice. Life insurance does the protecting for millions of Americans. Are your clients among them? For this Life Insurance Awareness Month, we’re considering the history of life insurance, how Americans today look at it, and why it remains a necessary part of modern life.
From Humble Beginnings
The earliest form of life insurance dates back to “burial clubs” of the Roman Empire. These clubs covered interment costs for members and provided for the bereaved in the event of a member’s death. It would take another 1,500 years, however, for the first policy to be issued — coverage for William Gybbons of London, dated June 18, 1583 and valued at 400 pounds.
The Amicable Society for a Perpetual Assurance Office, the first life insurance company ever established, was founded in 1706. Its function was to “collect annual premiums from policyholders and pay the nominees of deceased members from a common fund.” By the late eighteenth century, the insurance policy had taken its modern shape under the Society for Equitable Assurances on Lives and Survivorship. As the world’s first mutual insurer, it pioneered age-based premiums based on mortality rate.
In the Modern Era
Today, 52% of Americans have some form of life insurance, with an average policy cost of $20 per month. That means about 90 million American families rely on a policy, in one form or another, for financial protection and economic security.
Typically, Americans with life insurance feel more financially secure than those without — 68% compared to 47%. This coverage is extensive, able to cover family members, friends, children, and even charitable organizations in the event of misfortune. In fact, the only beneficiary you can’t have is a pet! (They have their own kind of insurance.)
Protecting Your Clients: Life Insurance and Financial Advisors
In today’s world, we’re all pretty familiar with the need for coverage – yet almost half of Americans don’t have any kind of a policy, and 41% of those who do feel their coverage is insufficient. Why?
Simply put, most Americans think policies are too expensive. A staggering 82 percent of the population believe a basic policy is three times more expensive than what reality would show. Another 28 percent haven’t bought a policy because of “other financial priorities.”
While these short-term concerns are understandable and often necessary, the fact remains that life insurance is a vital means of protecting you and your loved ones from a sudden life-changing event. The right policy could make the difference between a stable retirement or being one unforeseen event away from financial insecurity.
Moreover, many Americans aren’t sure what goes into crafting their policy. According to a 2023 survey, fewer than half of respondents know that health history and age are considered when determining a life insurance quote. Helping your clients understand the how’s and why’s of their coverage keeps their bases covered, provides added peace of mind, and demonstrates that sufficient coverage doesn’t have to break the bank.
