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Choosing Not to Carry Life Insurance is Not a Good Recession Strategy

In 20 years, when we look back on this recession, we’ll be able to remember not just personal difficulties, but major businesses that have floundered and “standard” practices that suddenly weren’t so standard any more. Life insurance policies increasingly fall into the latter category.

According to research conducted by LIMRA, an industry-sponsored group, 44 percent of households in America have no individual life insurance policy — including 11 million households with children under the age of 18. Forty percent of families surveyed said that in the recession, they have other financial priorities, yet that same 40 percent said that if the family breadwinner died, they likely could not meet expenses.

Is life insurance expensive? According to estimates from ING, a healthy 35-year-old man can carry a 20-year term policy worth $500,000 for approximately $25 a month. If rates are low, why don’t people do it? Life insurance isn’t mandatory, it’s a choice and thus one that’s easy to put off.

Anyone see Fed Chairman Ben Bernanke on 60 Minutes Sunday night? His basic messages were — this recovery is not yet self-sustaining and it’s going to be a long time before employment levels normalize.

Trust me, I know about penny pinching. Lincoln screams around my household routinely. But I have no dependents. If you have children, taking out a life insurance policy is a step you absolutely must consider. At the very least, get online and get some rate quotes. Remember, the time to get this kind of coverage is when you’re young and healthy.

Truly, what is more important? The expense now or the fate of your family if you step off a curb at just the wrong moment? I write about insurance, but I’m the first person to admit, I don’t like the insurance-driven world in which we live.

Some considerations outweigh personal tastes, however, and yes, even recession-level budgeting. The future safety of your family hedged against unforeseen catastrophe is one of them.

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