January 04, 2012
By: Jana Bell
While many Americans have life insurance coverage, a recent survey finds many aren't clear about its potential uses in investments or as a source of emergency funding.
The poll, conducted by the National Association of Insurance Commissioners, found that 63 percent of consumers had some form of life insurance. However, fewer were aware of all of its potential uses.
"When thinking about everyday finances, life insurance is not top of mind for most Americans," says NAIC vice president and North Dakota Insurance Commissioner Adam Hamm.
Relatively few Americans knew that those with a permanent life insurance plan could borrow against it in times of need. In addition, nearly two-thirds of respondents didn't know some life insurance policies have investment benefits, even though many said low-risk and tax-friendly investment options were important to have, given the current economic climate.
The group called on consumers to sit down and think about what life insurance option might be best suited for their individual situation.
Life insurance may be even more important to those families with low retirement savings. According to a LIMRA study last fall, 40 percent of U.S. adults did not contribute monthly to their retirement savings.
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