Doesn't take hero to grasp life insurance

Doesn't take hero to grasp life insurance
Kris Flammang

Personal Finance

Spiderman, Batman, Fred Flintstone, Harry Potter, Marge Simpson. Five fictional characters, five different circumstances and five different life insurance needs.

The main purpose of a recent poll conducted by the Life and Health Insurance Foundation for Education was to gauge American's perceptions of the need for life insurance. While the fictional subjects may have been somewhat fun and lighthearted, the topic of adequate protection is a bit more serious.

Using popular cartoon and literary figures that people could easily recognize and identify with, the poll found that most Americans are mistaken or misinformed when it comes to the need for life insurance.

Each character has a unique set of needs and circumstances surrounding his/her life, ranging from those of a single, wealthy adult male to a young student. Although some of the characters' occupations could increase the possibility of death, there exist more important considerations when evaluating an insurance need.

Unfortunately, a middle-class, stay-at-home mom like Marge Simpson scored the lowest on the poll of "who has the greatest need for insurance." Only 11 percent said Marge needed it the most. In fact, most stay-at-home moms provide valuable services like child care that would be extremely difficult and expensive to replace. She scored even lower than single, young male student Harry Potter, who most experts agree has no real need for life insurance.

Generally, the rule of thumb is that if anyone is financially dependent on you, it's essential that you get some sort of life insurance coverage. Many experts point to becoming a parent as the first sign that you should look into coverage.

That's why pollsters were rather alarmed that Fred Flintstone finished in the middle of the pack. Only 16 percent of those surveyed believed that he needed life insurance the most. As the single source of income in a married household and the father of a young child, he stands as a prime candidate for life insurance.

Single parents with dependent children are no exception to the rule either. Nearly 40 percent of single parents have no insurance coverage at all, which can be a risky choice. Among those who do have insurance coverage, two-thirds feel it's inadequate.

When estimating what's right for you, consider all outstanding debt, the cost of any children's future education, how many years of income you would like to provide your family and any charitable causes to which you would have given if you were still alive. Experts generally recommend that you have a policy that will replace at least six to 10 times your annual income.

A somewhat silly experiment that may make you smile reveals that most Americans should be more concerned with life insurance and who needs it most.

If you have coverage, re-examine whether it's adequate. You should consider who depends on you financially and for other support and make sure they are taken care of in the event of a tragedy. Even everyday superheroes need to make sure their loved ones are protected after they're gone.

Kris Flammang is a co-founder of LPF Financial Advisors, with offices in Lakewood Ranch. He is a chartered retirement planning counselor, certified financial educator and registered representative with Securities America, Inc. He can be reached at (941) 907-0101 or at kflammang@lpfadvisors.com.