September 18, 2009

September is life insurance awareness month: do you have the right coverage?

Jefferson City, Mo. - The Missouri Department of Insurance in September is encouraging consumers to review their life insurance coverage. Gov. Jay Nixon has declared this Life Insurance Awareness Month, saying it provides financial security in the event of death by helping family members meet immediate, ongoing and future financial objectives.

Nixon and Department of Insurance Director John M. Huff say consumers should consult a trusted, qualified and licensed financial advisor to help evaluate their suitability for various types and amounts of life insurance, whether they're currently covered or not.

"With so much at stake, it's essential to choose the kind of life insurance that is most suitable for your unique needs," said Huff. "A good financial advisor can help you make sure you don't carry too much, too little or the wrong type of insurance."

Two categories of life insurance

1. Term life insurance provides coverage for a specific number of years (term), such as 10, 20 or 30 years. It pays a death benefit only if the policyholder dies in the insured term. Term insurance has lower premiums than a cash-value policy of the same amount; however, it does not build up cash values that can be used in the future.

2. Cash-value life insurance offers a death benefit and invests part of the premium in an account policyholders can access at a later time. Cash-value premiums are higher at the beginning than they would be for the same amount of term insurance. Policyholders may borrow against the policy's value, use the cash value to increase income in retirement or even help pay for needs, such as a child's tuition, without canceling the policy. There are several types of cash-value insurance, including whole life, universal life or variable life.

Consumers should research insurance agents and companies before doing business. The Department of Insurance offers an online complaint index at, which lists consumer complaints against different companies. Consumers can also call the department at 1-800-726-7390 for help reading or understanding their life insurance policy.

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to maintain consumer confidence by examining and monitoring industries and professions and by establishing coherent and evolving policies. DIFP works to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.