A majority of Americans — 84% — say that most people need life insurance, according to a recent survey from LIMRA. But the same survey found that only 59% actually own some form of it.
May 2 is National Life Insurance Day, making May the perfect month for you to encourage your members to utilize union life insurance and ensure that they're doing so effectively. In particular, you can play an important role in reminding your members to regularly review and update their union life insurance.
When to Reevaluate
While critical life moments — like the birth of a baby or a chronic illness diagnosis — can often be hectic and challenging times, they're also important moments for evaluating life insurance policies. Often, members will want to increase their coverage during key life events, including:
- A change in marital status. Members who get married may not have had a life insurance policy in the past. Now is the time to consider one and to figure out how much coverage is needed given the couple's lifestyle and monthly expenses. Union life insurance may also need to be updated in the case of a divorce; members will probably want to change their beneficiaries to reflect the change in marital status.
- A new addition to the family. A member with a new baby may want to increase their coverage limit. If the member were to pass away unexpectedly, their spouse would no longer receive that regular paycheck. The money from life insurance could go toward funeral expenses, mortgage payments, food and even college tuition for their children one day.
- Chronic illness. Members who have chronic diseases that run in their families, like heart disease, diabetes or cancer, may want to consider increasing their coverage as they get older. Encourage these members to speak about their specific circumstances with a professional adviser. Generally, the cost of life insurance increases as people age, so members must weigh the cost with the potential benefit.
- A change in housing status. Purchasing a home is a big commitment that more likely than not locks a member into sizable monthly payments. If their spouse were to survive them, they may need more money to make those payments, so an increase in life insurance might make sense in this situation. On the flip side, a member that recently paid off their mortgage may not need as much insurance.
Communicating With Your Members
Periodic communications to your members can go a long way toward helping ensure that they're getting the most out of their union life insurance.
Prioritize key reminders like making sure members have correctly designated a beneficiary to receive the benefit, should they pass. Failing to name a beneficiary can complicate matters: When a person dies without a beneficiary named, the insurance company may pay the benefit to their estate — unless they have a surviving spouse — which could mean their heirs have to wait to receive the money. Beneficiaries should be identified as clearly as possible, with their full name, Social Security number and date of birth.
An ideal time to review life insurance optimization is during open enrollment. You may also consider running a blurb in your union newsletter or giving reminders during your union meetings a few times a year. Another creative way to communicate with members is to invite an insurance representative to meet with members, explain benefits and answer any questions they might have.
In some situations, however, members may prefer discretion, for instance in the case of illness or divorce. As you communicate to members about their insurance, let them know you're an available resource. If they know they can approach someone privately, they may be more likely to do so, helping them get the guidance they need.
With 15 years' experience writing for publications including The Wall Street Journal, Barron's, The Christian Science Monitor and Newsday — Deborah Blumberg specializes in business and finance and health and wellness. She writes about topics including corporate communications, financial markets, real estate, renewable energy, cancer, health education, nutrition, supplements, the microbiome and functional medicine. She was a Knight Center fellow and a Donald W. Reynolds National Center for Business Journalism fellow. Her time working in marketing and communications at JPMorgan Chase taught her how to best tell a company's story. She's adept at turning complex ideas into compelling copy. She's also an officer of the American Society of Journalists and Authors (ASJA) and a Women in the Visual and Literary Arts board member, and she is fluent in Spanish.