Would an Incentive to Buy Life Insurance Benefit the Economy?

That's a dry sounding subject, something that would have you nodding off in Economics 101, but we're living here in the real world. Where bad economic trends hurt with real pain, that's felt by real people.

There are dozens of benefits to having adequate life insurance coverage, two important reasons relating to this article are: providing for those left behind in the event of a death, and providing funds for an insurance carrier to invest in our economy.

There are approximately 68 million adult Americans without life insurance. Many more have less coverage than standard industry practices estimate they should have. That's real pain felt by those left behind when a parent or provider unexpectedly dies. In a lot of cases that unexpected death means not enough food on the table, the bills not being paid, and the hopes and dreams of an education and bright future are gone.

You may wonder how big of an investment the insurance industry has in the economy. In 2007, the insurance industry invested approximately 5 trillion dollars broken down as follows: 38% corporate bonds (1.9 trillion), 33% stocks, 11% government bonds, 6% commercial mortgages. That makes the life insurance industry the largest source of corporate bond financing.

When spouses and children are left behind with no means of support, they turn to government programs for aid and support, causing a drain on the government's resources which in turn causes a drain on the economy.

The government recently sponsored the Cash for Clunkers program that paid Americans for their old, gas guzzling cars if they traded them in on new cars. It's time we had the same proactive incentives for purchasing life insurance. Purchasing life insurance eases real pain and suffering and provides for the possibility of a future for those left behind when a parent or provider dies. It also pumps massive amounts of investment cash into the economy. A win-win all around.

There are currently some incentives in the form of tax credits (in some states) for buying long term care insurance. Tax free payouts are another. However, what is needed is a cash-in-your-pocket-NOW incentive to really entice people purchase life insurance.

Andy Albright