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(September 14, 2007) As our country marks the sixth anniversary of the September 11th terrorism attacks, it appears Americans’ financial habits are back to the way they were pre-9/11.
In the aftermath of 9/11, people in this country scrambled to protect themselves. Certified financial planners reported that up to 20% of the victims' families did not have an estate plan.
Those planners saw an immediate reaction from families who rushed to create wills. Sales of life insurance soared. Applications for individual life insurance policies jumped by 8.6% between October 2001 through June 2002, according to the New York-based information group Insurance Information Institute.
"It was a wake-up call to our mortality and people suddenly wanted to make sure their families were protected,” says Eugene C. Gordon, Chief Executive Officer of LifeQuote™, an online life insurance brokerage firm.
But six years later, those fears have calmed and statistics now show that applications for life insurance have actually been on the decline since 2002. Studies reveal that the average American is way underinsured.
Only 61% of American adults have life insurance protection, according to recent statistics by the Life and Health Insurance Foundation for Education (LIFE). That is a decline from 70% in 1984. Of those who have life insurance protection, the vast majority carry group insurance provided by employers, leaving them vulnerable if they lose a job.
Even so-called “emerging affluent households”—with annual incomes of $100,000 or more--- do not carry sufficient life insurance to replace their incomes according to findings of an online survey conducted by The Hartford Financial Group.
Right after September 11th, the federal government calculated compensation to meet the needs of families of victims of the terrorist attacks. The U.S. Justice Department recommended approximate payments of 12 times income for couples with no children and 20 times income for households with children.
LifeQuote’s Mr. Gordon feels the onus is on the life insurance industry to educate Americans about the importance of having life insurance. “We have to create awareness,” says Gordon. “If people realize how inexpensive it can be to buy peace of mind for their families, I have no doubt they will do the right thing.”
Life Quote's
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