A lack of an emergency fund can really create a vicious cycle for people, who were already struggling, or level people who thought the unthinkable could never happen to them.
When financial situations change—like getting married, divorced, losing or buying a home, surviving a natural disaster, or even death, people tend to forget update their coverage.
“We see that one in three Americans do not have life insurance. When a third of the country is at risk, potentially for leaving their family behind with all the financial baggage that they carry around today, that’s a scary situation,” said USAA’s Director of Life and Health Insurance Sean Scaturro said this is the time for you to evaluate your financial stability.
“The lack of an emergency fund can make people more reliant on credit cards-make that endless cycle of debt start to come to life,” said Scaturro.
September marks life insurance awareness month, a time when families should evaluate and at least have a conversation about their financial stability in the event of losing a primary wage earner.
He added that given the loss of a primary wage earner –one in three households would have immediate trouble paying for living expenses
Survey data shows nearly 40% of Americans have no life insurance including 65% of millennials
Americans are vastly underinsured, evidenced by the fact that 40% do not carry life insurance. Additionally, there are an estimated $12 trillion in uncovered life insurance needs for families nationwide. A recent survey by Insurance Quotesexamines why so many Americans remain uncovered.
Much of this could stem from the increasing number of part-time workers that has evolved in recent years. According to the U.S. Bureau of Labor and Statistics, 41% of all workers did not have access to life insurance coverage through their employer and that number skyrockets to 87% for part time workers. USAA found that of those who are insured, 25% feel that the coverage they have is not enough. This typically happens when people do not update their coverage when their financial situations change (i.e. getting married or buying a home).
Even worse, these coverage gaps are expected to increase, potentially leaving the average family without the ability to remain in a stable financial position after the loss of a loved one. According to the insurance research organization LIMRA, 1 in 3 households would have immediate trouble covering living expenses at the loss of the primary wage earner.
Having the right life insurance policy in place not only helps protect the financial future of you and your loved ones, it also provides peace of mind.