If you don’t yet have life insurance, or if you think you might need more coverage, than you are not alone. A recent study from the Life Insurance Marketing and Research Association shows 80 million Americans do not yet have life insurance and another 26 million say they need more coverage.

September is Life Insurance Awareness Month, an observation started in 2004, and the perfect time to learn about this important aspect of adult life.

Some important things to keep in mind:

Additionally, U.S. life expectancy at birth dropped in 2021 to its lowest level since 1996 according to new federal data, another reason Americans without life insurance should consider purchasing this coverage.

“Now is a perfect time to sit down with an insurance agent to review your insurance needs,” said Jason Terry, Director of Life Insurance for AAA.

AAA offers a checklist of some common expenses to consider in making the decision about how much life insurance to get.

• IMMEDIATE NEEDS
  
  Even families who put much effort into planning their future can overlook the immediate financial needs that follow a loved one’s death. When the insured passes away, the death benefit kicks in soon thereafter. However, before it can be allocated toward everyday expenses, the lingering matter of their final financial needs takes precedence. For many, this may include funeral and burial expenses, which alone can amount to several thousand dollars.

• ANNUAL INCOME
  
  Of course, one of the principal purposes of your life insurance policy is to compensate for any loss of annual wages that currently contribute to supporting your family and household expenses. You may be the sole income for your family, or you might share this load with a spouse or significant other who could be thrust into financial strife without your support.

• CURRENT ASSETS
  
  Depending on your financial stability, in the event of your death, your family might be entirely reliant on your life insurance benefits, but this won’t be the case for everyone. Investments and other assets should be taken into account when trying to determine adequate coverage.

• LONG-TERM EXPENSES
  
  Based on your stage of life (and that of your family members), you will need to plan out your insurance coverage accordingly. Especially if you have a whole life insurance policy, you need to account for not only your family’s lifestyle and survival – including, of course, necessities like housing, food, clothing, etc. – but also any unexpected expenses that may arise.

Consider all possibilities when discussing life insurance with your advisor. AAA can help get the conversation started here.

Unfortunately, there are some out there who want to take advantage of the fact that people may be concerned about their life insurance. Using misinformation and tricks, they hurt vulnerable customers.

Here are some common scams that everyone should be aware of.

• FAKE BENEFICIARY CLAIM

  You may receive an e-mail or message that claims you’re the beneficiary of someone else’s life insurance. They may even name someone you know and claim they passed. Or, they might lie and say someone bought a policy for you. In either case, they will likely try to pull information from you. This is just one of many ways to steal your identity.
    

• A PROBLEM WITH YOUR POLICY

  Once again, the scammer will reach out to you. When they do, it will appear as if they’re from your life insurance provider. For example, the e-mail might look similar to official ones you have received before or link to familiar looking websites.

  Then, they’ll claim something’s wrong with your policy. Often, the scammer tries to make you panic and act rashly. So, for example, the e-mail or message might say you missed your last payment. It will essentially ransom your coverage for details like your credit card information and Social Security number. 

• CHURNING AND TWISTING

  Both churning and twisting are annuity-based life insurance scams. They take advantage of annuity-based insurance, which allows you to invest and earn an income stream through your policy’s company. However, the waiting period for a payout can last 10 to 15 years.

  In churning, scammers offer an immediate cash bonus if you exchange your current annuities with new ones. But this resets the hold period. If you withdraw early, too, you face severe penalties.

  In the case of twisting, the scam artist coerces you into buying a new life insurance policy in place of your old one. They use false or misleading information to get you to do this, like policy restrictions or hidden premiums. And at the end of both of these scams, the money lines the pocket of the agent.

• HOW CAN I SPOT A LIFE INSURANCE SCAM?

There are a few ways you can identify potential scams. For example, the way they contact you may be suspicious. Look for flaws in their e-mails to you, such as misspellings or incorrect addresses.

Some scam artists are very good at what they do, though. If you have trouble figuring out if a company or website is legitimate, then contact your state’s insurance department. They can check if the company is real and if it can sell to you. The National Association of Insurance Commissioners (NAIC) can help you find your department’s contact information.

Don’t be afraid to make an insurer wait until you’re comfortable. Hold off on any paperwork until you’ve seen the agent is licensed. Also, avoid those who demand certain types of payment, like cash.

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For More information and local interviews:

Connecticut – Tracy Noble, TNoble@aaamidatlantic.com

Delaware – Jana Tidwell, JTidwell@aaamidatlantic.com

Indiana – Kara Hitchens, khitchens@aaa-alliedgroup.com

Kansas – Shawn Steward, ssteward@aaa-alliedgroup.com

Kentucky – Lori Weaver Hawkins, lweaverhawkins@aaa-alliedgroup.com

Maryland – Ragina Ali, RAli@aaamidatlantic.com

New Jersey – Tracy Noble, TNoble@aaamidatlantic.com

Ohio – Kara Hitchens, khitchens@aaa-alliedgroup.com

Oklahoma – Leslie Gamble, Leslie.Gamble@aaaok.org

Pennsylvania – Jana Tidwell, JTidwell@aaamidatlantic.com

South Dakota – Shawn Steward, ssteward@aaa-alliedgroup.com

Virginia – Morgan Dean, Morgan MDean@aaamidatlantic.com

Washington, DC – Ragina Ali, RAli@aaamidatlantic.com

West Virginia – Lori Weaver Hawkins, lweaverhawkins@aaa-alliedgroup.com