Sep. 11—September is Life Insurance Awareness Month and Walter Ferguson wants people to stop and think about it.
Ferguson, who works for Thrivent, said many people don't think about life insurance until it's too late. He said families are often caught in difficult situations when someone dies. In the past year, COVID-19 has also made life insurance a topic of discussion.
"A lot of people don't put much thought into life insurance because they think, 'I can get it later,' " Ferguson said. "They tend to put it off. What they don't realize is that life insurance goes by three key findings. First is your age, then your health and by how much money you want to spend monthly. The more you get, the more it's going to cost."
Ferguson said people also need to realize that they need to be prepared in case they live long lives because most companies stop writing policies at age 80. He said another reason to have life insurance is in case you die at a young age. He also warns that people who wait could be injured or sick and then classified at "uninsurable."
"If they deem you uninsurable, companies won't cover you," he said. "Those ones you see on TV that will sell to anybody are called 'guaranteed plans.' It's usually more expensive and you have to wait a full two years before the plan kicks in. A lot of people don't realize that."
Ferguson said people often aren't prepared for funerals and life after the death of a family member.
"Life goes on for your family members after you're gone," he said. "The bills are still going to keep coming. Life is going to continue for them."
Ferguson also noted that many funeral homes will not prepare a body or conduct services until they have a certain amount of money and that having a life insurance policy can help with those expenses.
"A lot of people don't realize the importance of life insurance," Ferguson said. "Life insurance is not for the people that die, it's for the people that you leave behind. With the proper amount of life insurance, you can leave a legacy behind. That's what our company, Thrivent, talks about. Besides home ownership, it's one of the best ways to create wealth or a legacy for the family members coming behind you."
Ferguson said there are three different types of life insurance, whole life, term life and universal life.
"Whole life is the one people traditionally bought and they bought it and paid it their whole life and it builds up cash value," he said. "The premiums stay the same.
"Term is straight insurance — it builds up no cash value. It is for a particular term, 10-year, 20-year or whatever. The way the term works is that after the term is up, all that money you paid to the insurance company is theirs to keep. You're basically taking a gamble that you're going to die within that term. If you outlive it, then you can get more insurance, but the cost will be based on the age you are now.
"Then you have universal life, which is basically a combination of whole life with a savings plan wrapped around it. If the markets are good, your premiums stay the same, but the death benefit goes up."
Ferguson warned people about "accidental life" policies.
"Your death certificate has to say you died due to an accident — it can't say you died of natural causes," he said. "It also states that you cannot be in the process of committing a crime. If you get in an accident, it's going to pay. If you have a heart attack or something like that, it won't pay. Accidental death companies only pay out maybe 5% of their policies. If it's not an accidental death, they don't have to pay."
The Life Insurance Marketing Research Association did a survey this year and said 36% of people planned to buy more life insurance this year. That number increased to 48% for millennials.
"With COVID-19, those numbers have gone up," Ferguson said. "More people are planning to buy life insurance this year and next year. LIMRA said that right now, there are 110 million Americans living with an insurance gap. My message is that I want to try to educate people on the various types of insurance and educate them on what's best for them."
He also stated that life insurance is not a taxable benefit and that many people don't know that. Ferguson's office is located at 2524 Lee Ave., he can be reached at 919-478-0107.
"There is also a lack of knowledge about insurance in the African-American community," Ferguson said. "I'm passionate about that. Historically, we've always been undersold and overpriced. The insurance industry really didn't take us serious for a long time — say in the '40s and '50s. With it being Life Insurance Awareness Month, I just wanted to get the word out."