Did you know approximately 102 million American adults need life insurance or more of it? September is Life Insurance Awareness Month, a time to consider your life insurance plan — whether you currently have one or don't. Life can move fast; American families are trying to work through their day-to-day responsibilities to provide for their children, and many times a life insurance plan may get overlooked, or household providers are unknowingly underinsured. For anyone who has dependents or loved ones they want to care for after passing, life insurance is a necessity that ensures lost income doesn't translate into tangible material losses once you're gone. Life Insurance Awareness Month gives you the opportunity to assess whether your plan is right for you and your loved ones, or if you need to change or start a new plan.
History of Life Insurance
The idea of life insurance can be traced back to ancient Rome, where soldiers formed “burial clubs.” Members would contribute to a fund that covered funeral expenses for those who passed away, which would ensure proper burial rites. Similar practices also existed in Egypt to reflect the importance of respect for one’s funeral. Later, during the Middle Ages, guilds were established as a form of insurance to offer financial assistance in times of need, such as rebuilding after disasters or covering funeral costs.
In 1583, modern life insurance was born when Richard Martin, who purchased the world’s first recorded insurance policy, insured a man named William Gybbons for a total of £400 in the event of his death within the year. Years later, in 1706, the Amicable Society for a Perpetual Assurance Office was established in London. This marked the first modern life insurance company where members paid annual contributions and benefits were given to families with deceased members.
In the 18th and 19th centuries, life insurance began to gain popularity in America. In 1759, The Presbyterian Church began offering life insurance to the clergy which eventually evolved into formal life insurance models. Additionally, the demand for life insurance dramatically increased during the Civil War, leading to a tripling of life insurance coverage during the years of the war.
How Do I Know if I'm Underinsured?
Let’s discuss five different circumstances, according to Life Happens, that raise the possibility of being underinsured.
The first is if you only have life insurance through your employer. Life insurance plans offered by your employer typically offer very limited coverage, such as a year or two worth of salary. If you have any significant debts or plan of providing college education to loved ones, it’s unlikely that your employer’s plan will meet your family’s needs. Additionally, life insurance provided through your employer is normally only available while you have the job; If you must leave your job for any reason the coverage will no longer apply.
The second circumstance is if your income has increased. We can all celebrate a raise, as it is an important landmark at our jobs and means more money. However, if you are making much more income today than when you first bought your life insurance policy, it is possible that you are underinsured.
Third, you may be underinsured if your stay-at-home spouse doesn’t have a life insurance policy, and if so, it’s necessary to start thinking about getting them one. Even if your spouse isn’t making income that would need replacement, they may be paying for childcare or other services that would need to be paid for if they were to pass.
Speaking of children, you might be underinsured if you had a child. Your life insurance policy needs differ significantly once you decide to bring a child into the family, as children can be extremely expensive. In 2025, it is estimated that raising a child costs about $30,000 per year from birth to age 17. Therefore, it is worth looking into your current plan to ensure that your child can get all the necessary resources.
Lastly, the fifth circumstance that can alter your life insurance policy is buying a new home. Paying a mortgage is one of the biggest investments we make during our lifetime and may be unattainable for your family if you were to suddenly pass. If you bought a new home since setting up your life insurance policy, you might find that you need more coverage to make sure your family will be able to pay off the debt.
If you are looking to start a life insurance plan or wondering if your policy is right for you, KCCU’s investment team is here to help you get started. Our financial consultants offer a holistic approach and specialize in several areas within wealth management, including life insurance. KCCU wants nothing but the absolute best for its members; we’re here to ensure that your future financial health is in good hands and can be distributed to your loved ones.
Life Insurance Awareness Month is an opportunity to reflect what you wish for your family or loved ones’ financial position to look like if you were to pass. Investing in life insurance means investing in the people you care for. If you have not signed up for a plan or are unsure about your current plan, this month is your chance to set you and your loved ones up for financial success.
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