That’s a dry-sounding topic, something that would make you fall asleep on Economics 101, but we’re living here in the real world. Where bad economic trends hurt with real pain, real people feel that.
There are dozens of benefits of having adequate life insurance coverage, two important reasons related to this article are: to provide for those left behind in the event of death, and to provide funds for an insurance company to invest in our economy.
There are approximately 68 million adult Americans without life insurance. Many more have less coverage than standard industry practices estimate they should. That is the real pain felt by those left behind when a parent or provider dies unexpectedly. In many cases, that unexpected death means there isn’t enough food on the table, bills aren’t being paid, and hopes and dreams of an education and a bright future are gone.
You may be wondering how big an investment the insurance industry has in the economy. In 2007, the insurance industry invested approximately $5 trillion broken down as follows: 38% corporate bonds ($1.9 trillion), 33% stocks, 11% government bonds, 6% commercial mortgages. That makes the life insurance industry the largest source of corporate bond financing.
When spouses and children are left behind with no means of livelihood, they turn to government programs for help and support, causing a drain on government resources which, in turn, causes a drain on the economy.
The government recently sponsored the Cash for Clunkers program that paid Americans for their old gas-guzzling cars if they traded them in for new ones. It’s time we had the same proactive incentives to buy life insurance. Purchasing life insurance alleviates real pain and suffering and provides the possibility of a future for those left behind when a parent or provider dies. It also injects massive amounts of investment cash into the economy. A win-win all around.
There are currently some incentives in the form of tax credits (in some states) to purchase long-term care insurance. Tax-free payments are another. However, what is needed is a cash incentive in your pocket NOW to really entice people to buy life insurance.
Andy Albright
