When your children marry, buy homes, and welcome grandchildren, they step into new responsibilities that depend on their income. Yet many of today’s young families carry only the basic life insurance provided by their employer, often just 1x their salary or a flat $50,000.
That sounds helpful, but in reality, it falls far short of the financial protection their family may need if tragedy strikes.
The Coverage Gap
A 2023 study from Life Happens and LIMRA found that nearly 50% of Americans have no life insurance coverage at all, even though 39% said they intended to obtain coverage within the next year, (Kaplanfinancial.net). Among those who do have insurance, many rely solely on their work-sponsored plan.
But here’s the problem:
- Employer coverage ends if your child changes jobs.
- $50,000 may cover funeral costs, but not years of income replacement.
- Experts at Insurance Information Institute note that a good rule of thumb is 10–20x annual income—far more than what’s provided through most workplaces, (iii.org).
For a family with a $70,000 income, that means between $700,000 and $1.4 million in recommended protection—not $50,000.
Why It’s So Important
The purpose of life insurance is simple: to ensure a family can continue their lifestyle and meet their goals, even if one parent is no longer there to provide.
Without personally owned life insurance, surviving families often face:
- The loss of income needed to pay a mortgage.
- The loss of employer-provided health insurance and retirement contributions (hidden income).
- Reduced financial flexibility at the exact moment they need it most.
As Kiberly Lankford explains, even with Social Security survivor benefits or employer-sponsored coverage, most families still face a significant shortfall in income replacement, (Kiplinger.com). And when young children or aging parents depend on that income, the gap can quickly become overwhelming.
A Parent’s Role
As parents, you’ve worked hard to protect your family. Now, one of the most valuable gifts you can give your children is guidance. Talk to them about reviewing their coverage and making sure their spouse and children are truly protected.
Encourage them to look beyond the workplace policy. Personally owned life insurance ensures coverage is portable, flexible, and aligned with their family’s real needs—not capped by an employer’s limits.
Next Steps
At Guided Seasons Wealth Advisors, we help families in Idaho Falls and Eastern Idaho plan for life’s uncertainties. Together, we can evaluate your children’s needs, compare options, and secure coverage that provides peace of mind, financial stability, and protection for your grandchildren’s future.
👉 Talk to your children today.
👉 Schedule a consultation with Guided Seasons Wealth Advisors to explore affordable, personally owned life insurance options.
References
- Life Happens & LIMRA, 2023 Insurance Barometer Study via KaplanFinancial.net
- Insurance Information Institute (III), Life Insurance Basics via iii.org
- Kimberly Lankford, “How Much Life Insurance Do You Need?” via Kiplinger.com