Why Life Insurance may be misunderstood

Few financial solutions can elicit an emotional response like life insurance. This is understandable as a life policy typically deals with a topic many find unpleasant.

But do most of us genuinely understand what life insurance does and how it works?

Forbes Magazine recently surveyed 2,000 Americans and found that:

• 82% of Americans don’t understand how life insurance is priced.
• Over 50% are unaware that a life insurance beneficiary could be a friend or a charity.
  
  
• Almost half are unclear about which possible circumstances of death may be covered by policies.
  
  

The truth about life insurance may be different than you expect. However, several factors affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

With so many choices and products, it isn’t just about learning what life insurance does. If you want more insights about life insurance's role in your finances, now might be an excellent time for us to talk.

Tim Golas, Spurstone Partner

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