When insurance customers seek out life insurance, they typically do it for the future financial protection of their loved ones. These types of policies can also be used as a source of cash when in difficult financial straits, But according to a recent survey, few people use them as such.
Adam Hamm, vice president of the National Association of Insurance Commissioners, the organization that conducted the poll, said individuals are also often unaware of the investment features some life insurance policies provide.
"When thinking about everyday finances, life insurance is not top of mind for most Americans," said Hamm. "According to our survey, more than two-thirds of consumers don't know some types of life insurance include a cash value, and nearly half don't think of life insurance as an investment option."
He added that permanent life insurance policies serve as a more conservative alternative to investing in stock, as they accumulate interest, often as much as 3 to 4 percent per year.
Insurance agents would be wise to inform their insurance leads of these benefits, as they may be more interested in buying life insurance if they're fully aware of the benefits of having a policy.