As benefits season kicks off, you may be focused on the changes to your health plan. But be sure to pay careful attention to your life insurance options when you fill out your annual enrollment forms.
That is because the typical U.S. company usually only offers one- to three-times salary as a life insurance benefit at no cost to workers, and it ends when you leave the job.
Still, this is all many people have. Only 70 percent of Americans – some 87 million households – have any kind of life insurance coverage, according to the new 2016 survey by life insurance research group LIMRA. Nearly half of those surveyed by LIMRA have only group policies, with an average coverage of $236,000, or 2.6-times income replacement.
“If you’re 26, with no student debt, on your own with no family, then maybe one-times your salary is sufficient,” says Anita Potter, assistant vice president for LIMRA.
The industry recommendation from LIMRA is to have more than double that, and some financial experts recommend even more.
“The old rule of thumb used to be 10-times income, but with today’s markets and lower interest rates, you need closer to 15- or 20-times,” says Marvin Feldman, president and CEO of Life Happens, a non-profit group formed by seven insurance producer organizations.
See full story at www.reuters.com