September is Life Insurance Awareness Month, but regardless of what time of the year it is, it’s never too late to consider how much coverage we have. At least one in three households would have immediate trouble paying living expenses if the primary wage earner died, and 40% have not bought life insurance because they are unsure of how much or what type to buy, according to the 2016 Insurance Barometer Study by Life Happens and LIMRA.

Because of these statistics, it is important for advisers to continue to inform clients of the importance of offering more than a one-time basic salary life insurance plan.

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“It’s critically important for people to think about life insurance because we found that 70% of employees say that after a spouse or a loved one passes away, they are impacted from a financial security or lifestyle perspective, says Jamie Madden, regional vice president of regional and small business solutions at MetLife. “Employees look to their employer for financial security and to build that financial security at the employer workplace.”

How much is considered insured?
At least 93% of American workers believe that life insurance is important, according to MetLife’s most recent employee benefit trends study. However, three out of 10 Americans feel they are underinsured, which means 70 million people don’t have the coverage they need.

“We find that employees should be calculating 60% of their income times the number of years until their retirement would give them an approximate number of how much life insurance they need,” Madden says. “Based on our benefits trend study, we find that 70% of people believe that three times their basic annual earnings is adequate.”

What else can life insurance help with?
Among covering funeral expenses, wealth transfer and estate planning, life insurance can also assist with future financial concerns such as health-related costs, retirement savings, potential loss of income and the cost of college tuition.

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“65% of consumers believe life insurance is a necessity and they recognize the core value it provides,” says Mike Burns, senior vice president of life and customer solutions at Lincoln Financial Group. “However, there is a broad array of additional financial concerns that keep consumers up at night that life insurance can also help to alleviate.”

When considering how much to invest into life insurance, only 14% of people were aware that life insurance can potentially help offset the cost of healthcare in retirement, according to a study by Lincoln Financial Group. Similarly, more than 50% of consumers were concerned about outliving their money in retirement, with just 11% understanding that life insurance can help protect against longevity risk.

“Education on the value of life insurance can come from a few different sources. While some may work with a financial adviser, others might look to their employer for information — some may look to both,” says Dick Mucci, president of Lincoln Group’s benefits business. “Life insurance is often sold through the workplace, and employer communication is a great channel for education that can touch multiple generations.”

What does my generation think?
For millennials and Gen X, the strongest trigger for thinking about life insurance is the start of a new job or during annual open enrollment for benefits. On the other hand, those in the baby boomer generation say their primary motivator for purchasing life insurance was getting married.

“Today’s advisers must educate their clients on the realities of life insurance, and what it can help them to accomplish,” says Andrew Bucklee, senior vice president and head of insurance solutions distribution for Lincoln Financial Distributors. “Starting these conversations early is critical, as life insurance provides value across generations — for any age and stage of saving and retirement planning.”

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