Understanding and Closing the Life Insurance Protection Gap

When someone who earns money dies, their family needs money to keep living.

Life insurance is meant to give that money, but many people don’t check if the insurance is enough.

The difference between what the family needs and what the insurance pays is called the protection gap.

It can be hidden because people forget about old policies or employer coverage that ends when they leave a job.

To find the gap, you add up all debts, living costs, and future goals, then subtract the money you already have from insurance.

Term insurance is a cheap way to fill a big gap.

Checking the gap every year helps make sure it stays small, so the family isn’t forced to sell a house or dip into retirement savings when a claim happens.