The Value of Life Insurance in a Rough Economy

Learn why spending now can save you later.

September 2, 2010
Sponsored by Prudential Association and Affinity Marketing

Times are tough, and most people are looking for ways to cut back. As a financial professional, you probably have many ideas on how to trim costs and preserve savings. But also important is stressing the need to preserve financial security.

When considering cost-savings options, you may wish to consider the following reasons why life insurance — despite being an expense — may be worth it. If the goal is weathering the financial downturn, life insurance can help:

  1. Supplement investment portfolios whose value may be decreased due to the economic downturn. If investments have lost value, there may be less to leave for loved ones in the event of a breadwinner’s death. New or increased life insurance coverage can make up the difference lost due to shrinking investments.
  2. Keep loved ones in the family home. If the breadwinner in the household dies, his or her death may leave survivors unable to make mortgage payments. Subsequently, survivors may be forced to sell their home in an effort to avoid falling behind on payments or foreclosure. And any real estate expert would tell you the current economy does not make this a seller’s market; loved ones may not get the asking price they need, let alone the price they want. A life insurance policy in the amount of the outstanding mortgage could help loved ones pay off their home and sell it only when and if they choose.
  3. Preserve businesses. If insureds are small business owners or have joint assets with other individuals, a life insurance policy could help insulate those assets from the repercussions of a major player’s death.

You’ll want to do your best to help withstand the onslaught of a tough economy. Understanding the risks of not having insurance is one way you can succeed.

For more information on benefits available to you as an AICPA member, please visit: www.cpai.com

Courtesy of The Prudential Insurance Company of America, Newark, NJ.