You don’t have to be an economist to realize the impact of inflation. A trip to the grocery store will provide a quick lesson. But how does inflation impact life insurance? There are ways in which inflation does and doesn’t make a difference when it comes to life insurance. Here’s a look.
Inflation Will Impact the Value of Life Insurance Proceeds
What looks like sufficient coverage today may not look quite as adequate in the coming years. There was a time, for example, when million dollar life insurance policies were rare. They are much more common today. Such a policy taken out 20 years ago will buy significantly less today.
The Relative Value Between Premium and Proceeds Will Stay the Same
While the value of the proceeds of a life insurance policy may be eroded somewhat by inflation, it is important to note that in most cases of whole life and permanent insurance, the relative value will remain the same. In other words, what you pay in premiums is also being eroded at the same pace as the benefits. This keeps benefits or proceeds in relative balance with what you pay.
It Is Why You May Want to Revisit Your Coverage
Inflation is one of the key reasons to have a life insurance review every few years. What seemed like a large amount of coverage may not be enough under today’s prices. College is more expensive, as are living expenses in general. You also may be making more income to replace now than previously. A life insurance review can help ensure your coverage is keeping up with inflation and the financial goals you have for your family.
Getting a life insurance review is simple. Gather your policies and contact one of our independent life insurance professionals. They are qualified to help canalize the policies issued by any company. Have a discussion about your current goals and allow them to do the work for you; shopping a network of companies to find you your best value. Of course, the final decision is yours.
Is inflation eating away at the value of your life insurance policies? Should you be concerned? Get a life insurance review and price quote today for the peace of mind you and your family deserve.