Insurance For The Living - Not Dead

More middle class families are facing hard times in a tough economy, which has led to a greater share of their household income being needed for basic living expenses and less money being available for purchases they consider discretionary or nonessential.

 

Life insurance is often one of those expenses that gets placed on the back burner when other financial needs come to the forefront. The 2010 study found that ownership of individual life insurance policies had hit a 50-year low and that 30 percent of all U.S. households — 35 million people — have no life insurance protection at all.

In its 2013 Insurance Barometer Study, LIMRA found an estimated 11 million U.S. households with children under the age of 18 where the parents have no life insurance. “You never know what kind of curve balls life will throw at you. When people say they cannot afford life insurance, at the end of the day it’s a matter of what their priorities are.”

 After nine years of marriage, Officer Mayhle and his stay-at-home wife, Shandra, were living from one paycheck to the next. They had two daughters, ages 4 and 2. Their housing expenses had gone up. They needed a new car. And the couple had even begun discussing the idea of Shandra babysitting to bring in extra money.

When their financial frustration reached a breaking point around the summer of 2008, the Mayhles decided the $50,000 whole life insurance policy they bought when they got married in 2000 had to be dropped. They would use the policy’s cash value for a down payment on a 2007 Ford Explorer.

“We were looking at our budget and I believe at the time we were paying $35 a month for the policy and at the time it would have been nice to have the extra $35 a month,” she said. “So the plan was we needed the cash value that had built up.”

As fate would have it, instead of cashing in the policy for about $1,200, Mayhle’s insurance agent convinced him to change it to a $250,000 20-year term life policy for around the same monthly payment.

Nine months later, Ofcr. Mayhle was killed in the line of duty on April 4, 2009, one day after he turned 29 years old. The devastating turn of events left his family emotionally torn, but the insurance helped them get through the mourning process and replaced some of the income that was gone forever. Now his widow has become an advocate for life insurance, partly because of her new job in customer service for an insurance agency and partly because of her own experience.

There were many people in and out of her house within hours of the news of her husband’s death after responding to a domestic disturbance becoming public.One of her visitors was insurance agent Chad Gregorini, who came to inform her that her husband had a $250,000 life insurance policy through State Farm Insurance Co.

“That was huge,” she said. “In my head, I was able to think, ‘OK. I will pay off the house, the car. I will get a job, but at least the main things will be taken care of.’