Expert Profiles Those Needing Life Insurance

Jeanette A. Tucker, Claesgens, Mark A.  |  1/12/2007 11:20:35 PM

News You Can Use Distributed 01/12/07

Holy premium, Batman! Who has the greatest need for life insurance – Batman, Spiderman, Fred Flintstone, Harry Potter or Marge Simpson? "How would you respond?" asks LSU AgCenter family economics professor Dr. Jeanette Tucker.

Americans think superheroes need life insurance more than moms and dads. The Life and Health Insurance Foundation for Education (LIFE) recently asked that question to more than 1,000 Americans. The most common answer (28 percent of respondents) said that Spiderman has the greatest need for life insurance.

"Although his daredevil antics may suggest that he is the most likely to die, Spiderman does not need insurance," Tucker says, explaining, "He earns little income and has no children. His wife is successful and not financially dependent on him."

Eighteen percent of respondents chose Batman, a wealthy bachelor with no children. Since no one depends on him financially, he doesn’t need life insurance, although estate planning would be in order to address estate tax issues.

"Sadly," Tucker says, "only 16 percent said that Fred Flintstone, a married father with a young child, needs life insurance." Fred, the primary breadwinner of the Flintstone family, has a pressing need for life insurance to ensure that Wilma, a homemaker, and daughter Pebbles could maintain their level of living if Fred were killed on his construction job.

Fifteen percent chose Harry Potter, a teenager. Harry is a full-time student with no siblings or parents who might be financially affected by his premature death. Thus, he doesn’t have a need for life insurance.

Only 11 percent chose Marge Simpson. Marge is a stay-at-home mom who earns no income. She, like Wilma Flintstone and homemaker moms everywhere, has a huge need for life insurance. Why? Not all family contributions are monetary. Stay-at-home parents raise the children and perform many household services that would be expensive to replace; consequently, they have a significant need for life insurance.

Though fictional, the life situations of these characters illustrate just how varied real people’s life insurance needs may be. The survey suggests that many Americans harbor misconceptions that prevent them from getting the financial protection their families need.

Confusion exists about the basic reason people need life insurance. Tucker says that if your loved ones stand to suffer financially upon your death, you need life insurance. Whether you are a superhero or a super parent really misses the point, regardless of how dangerous your job is, because you never know what tomorrow will bring. If someone depends on you financially, it is imperative to make arrangements that will ensure that that person will be taken care of when you are no longer living.

To help evaluate your needs, consider these tips from LIFE:

– Think about who depends on you. Dependency includes anyone who relies on you financially, including your spouse, children, parents, other loved ones and business partners. Periodically re-evaluate your insurance needs whenever circumstances in your life change, such as getting married, having a child, buying a home or getting a new job or promotion.

– Consider how much life insurance you need. Determine the amount of money your family will need to cover immediate expenses and how much they will need over the long-term to maintain their level of living. An interactive calculator is available at www.life-line.org/lifecalculator to help you determine your needs.

– Learn about different kinds of life insurance. Evaluate the different kids of life insurance coverage available, including term and permanent policies, and determine what kind of life insurance may be right for you. LIFE provides an interactive decision guide at www.life-line.org/whatkind to help determine the type of insurance that best fits your needs.

Life insurance is designed to protect against a financial loss. If there is no such loss, life insurance is not needed. Fred Flintstone and Marge Simpson need life insurance. Harry Potter, Spiderman and Batman do not.

"If you are financially responsible for the well-being of others, you have a very real need for life insurance," the family economist emphasizes. Tools and professionals can help determine the amount and type of life insurance that meets your needs.

For related family economics and consumer topics, click on the Family and Home link on the LSU AgCenter homepage at www.lsuagcenter.com. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.

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On the Internet: LSU AgCenter: www.lsuagcenter.com
On the Internet: http://www.life-line.org/
Contact: Jeanette Tucker (225) 578-5398 or Jtucker@agcenter.lsu.edu
Editor: Mark Claesgens (225) 578-2939 or mclaesgens@agcenter.lsu.edu

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