By Ted Gotsch
Policy Content and Publications Manager
I’m a man of a certain age, as some would politely say. So when I think of a good explanation for why it’s important for Americans to obtain life insurance, I turn to fictional teen icon Ferris Bueller for some wisdom:
“Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it,” he famously said in the 1986 movie “Ferris Bueller’s Day Off.”
Now I’m not going to pretend Ferris was talking about life insurance—he most certainly wasn’t. But his musings still ring true in this instance. Missing the opportunity to purchase a life insurance policy because of other things going on in your life would be a lost opportunity to ensure the security of your loved ones.
September is Life Insurance Awareness Month, so it’s a great time to learn about the importance of life insurance in all its varieties. As it stands, about 52% of U.S. adults have life insurance, led by Gen X adults (those between ages 46 and 61) with 58%. Not surprisingly, according to insurance trade association LIMRA, Gen Z adults (those under 30) lag behind others in owning a policy. Less than half have life insurance, and a third of the nation’s youngest adults say they have not bought one because they don’t know how much they need or what type to buy.
But there are a lot of reasons to own life insurance—to replace lost wages; to cover burial and funeral expenses; to transfer wealth or provide an inheritance; and to help pay off a mortgage. LIMRA reports that of those who have policies, nearly half (47%) get it through their employer.
Through technical input drawing from the actuarial profession’s expertise and experience, the Academy helps create a stronger life insurance system that better protects consumers’ interests and fulfills its founding mission to serve the public and the profession. The Life Practice Council (LPC) is the engine driving this valuable public service.
Earlier this year, for example, its Life Products Committee filed comments with the National Association of Insurance Commissioners (NAIC) about a Buyers’ Guide on Deferred Annuities that is being drafted. Among its comments to the NAIC’s Annuity Buyers Guide Working Group was the need to make the document clearer when it came to explaining the risk of different annuity products to the public.
Similarly, the LPC commented on a NAIC request for input on variable universal life and indexed universal life insurance products, stating, “We support the formation of a drafting group to consider prospective clarifications to nonforfeiture requirements including the calculation and amortization of the initial expense allowance for Universal Life, Indexed Universal Life and Variable Universal Life.”
The actuarial profession is uniquely positioned to provide input on some matters that may seem technical or obscure to the lay person, but that need meaningful scrutiny and a voice to ensure that consumers and the public are protected and well-served by the life insurance system that is being promoted this month. To learn more about LPC’s work, visit the Academy’s list of life-related publications.
Oh yeah, and Save Ferris!