Do Not Drop Your Life Insurance Because of the Economy!

The current economy is causing pain for most Americans. And it does not matter where you live! People are struggling to make ends meet because of the following reasons: laid off, reduced hours, or pay cut. Regardless, people are afraid to spend money. Wisely, these individuals are looking for ways to save more money through cost cutting measures. But unfortunately, some of these people believe they can afford to cancel their life insurance policies.

Not Good Enough Reasons to Drop Your Life Insurance

Many times, individuals are torn when making financial decisions in a bad economy. They worry about how to pay their bills on time, such as their mortgage or car note. Sometimes, they are forced to sell their dream home just to get by. Their lives are forever changed because of these desperate measures. Therefore, these individuals may be stressed out at home or at work. They may become hopeless, unless these receive a big raise and/or win some money. Some of these individuals will agonize over unpaid bills during a night of sleep. When will their worrying end?

Most people are determined not to fail. They desire to recover more than their pride. And so, these individuals fight not to have their credit history ruined. This is a survival tactic that is present in most people. You may not have much, but you want to keep what you have!

Unfortunately, some people do not strategize well. Instead of eliminating vices (e.g., alcohol, cigarettes and gambling) from their budget, they eliminate necessities that they do not use on a daily basis, such as life insurance. People are not going to eliminate soap and deodorant from their budget, for individuals use soap and deodorant on a daily basis. However, they will drop their life insurance policies.

People have many excuses for canceling their life insurance, especially when they are financially struggling. Here is a list of my favorite excuses that I heard as a field insurance agent:

1. I have enough life insurance through my job ($50,000 probably won’t pay off your mortgage)

2. I will pick it back up when my finances improve

3. My kids are grown; my spouse will still be working

4. I am in good health; things should not change over the next year

5. I have enough money in my bank account to bury me.

Be Real! Why You Should Not Drop Your Life Insurance?

Today, you may be healthy. Tomorrow, you may be diagnosed with a critical illness. Your life insurance carrier will not come back to elevate your health again on your 5 year old life insurance policy, unless you decide to lapse the policy, for non-payment of premiums and apply for reinstatement. Otherwise, you would have to possess a term life insurance policy that needed to be renewed in order for additional underwriting to be required. By dropping your life insurance policy, you expose yourself to risk. What if you are not medically eligible to reapply for life insurance in the near future due to disease? In addition, you could die the day after the insurance company cancels your life insurance policy. Your family would get nothing.

If you feel that you cannot afford the life insurance premiums, call your insurance company. Many companies will allow you to reduce the face amount in order to keep a smaller amount of coverage at a reduced price. Do not cancel your life insurance policy without consulting your financial professional. You could be leaving your family in more financial distress by not keeping your life insurance policy, if you die prematurely.