Here’s a tip about life: It’s OK to ease into it. In fact, we recommend a phased approach. And pay attention to the details. You’ll discover some hidden gems there. This advice is particularly geared to the 95 million adult Americans without life insurance. And to the millions of American workers who have some life insurance coverage, but not enough, according to the nonprofit LIFE Foundation. As the LIFE Foundation focuses the benefits industry on Life Insurance Awareness Month in September, Unum (NYSE: UNM) unmasks some secrets to getting the most out of life. “Life insurance is one of the building blocks of a solid financial plan,” says Debbie Cecil, director of life products for Unum. “But it’s not a one-size-fits-all benefit, and there are a variety of options available to help individuals make the right decisions at the right time for their needs.” Life insurance is frequently offered in employee benefits packages provided by employers – but this coverage is usually a group policy that may not allow for continued protection if the employee’s job status should change. Access to an individual policy purchased in the workplace may offer employees the option for “guaranteed issue” at the initial enrollment. In some instances, the employee may be able to purchase more coverage later without having to answer additional health questions. To make the right financial protection choices, it is critical for employees to understand the different types of life insurance available. Here’s a breakdown:
- Term life insuranceFor young, single workers who don’t have many financial obligations and for young families who need a lot of income protection during their working years, term life coverage is usually adequate and affordable. The policy lasts for a defined period of time, called the term. A term life policy does not accumulate cash value. Rates typically go up as the policyholder ages, but are generally lower than whole or universal life policies.
- Interest-sensitive whole life insuranceInterest-sensitive whole life offers premiums that will never change, and the policy is active as long as premiums are paid. These policies accumulate cash value, and when layered with term life, can provide the protection needed throughout an individual’s life stages. Interest-sensitive whole life can offer a reduced, paid-up policy option that requires no additional premium at age 65 when the individual’s income and income protection needs decrease.
- Universal lifeUniversal life premiums are flexible and can be adjusted to fit an individual’s changing financial lifestyle. So premium contributions can be adjusted to balance against an employees’ financial status or needs, which typically reduce at retirement.
“The addition of a long-term care benefit rider to Unum’s whole or universal life plan can give employees and their spouses added protection without breaking the bank,” Cecil said. “The long-term care benefit rider is an easy and flexible way to assist with long term care or expenses.”To help employees better understand which benefits make the most sense and when, Unum launched an interactive site, getbenefitsmart.com. This site offers clear, real-world descriptions of what benefits are important at different stages of life. Life Insurance Awareness Month (LIAM) is an industry-wide effort coordinated each September by the nonprofit LIFE Foundation. The campaign this year features Buddy “The Cake Boss” Valastro, the 2012 spokesman for the campaign, whose father died of cancer when Buddy was just 17, leaving his family with no breadwinner – and no life insurance. About Unum Unum ( www.unum.com) is a leading provider of financial protection benefits through the workplace. The disability insurance leader in the U.S. for 36 years, Unum’s portfolio of financial protection products also includes life, accident and critical illness, which help protect millions of working people and their families in the event of an illness or injury. In 2011, Unum paid more than $5 billion in benefits to more than 450,000 individuals and their families.