As a general rule, I like to keep my personal and business lives separate (good for my mental health). But sometimes that’s unavoidable. This is one of those times.

The vast majority of Americans know that life insurance is something most people need (93% in the LIFE Foundation’s last survey). Yet most Americans either have no life insurance at all or less than they need. Why? Because they don’t think “it” will happen to them. Sure, some people die before their time. But me? Nah. Won’t happen.

To help people understand how dangerous this kind of thinking can be, we at the LIFE Foundation tell lots of realLIFEstories. These are true stories of everyday people who DID die before their time, but who had the foresight to include life insurance in their financial plans.

We also share statistics. Do you know how many adult Americans die in the prime of their life each year? 550,000. Well, behind statistics like this one are real lives … lives that ended much sooner than they should have.

Over the past two weeks, I’ve experienced two cruel reminders of just how fleeting life can be. I lost two dear friends, both 44 years old. One died of cancer (her third bout), the other of a massive heart attack that struck ruthlessly, with no prior warning. Each was married. One left behind two young children, the other, a 10-year-old daughter.

People die before their time, all the time. And none of us knows who the unlucky ones will be. The job of the LIFE Foundation is not to scare people into buying life insurance. But it is our job to remind people of the facts. And sometimes the facts are cold, hard and all too real.

People need to acknowledge that the future is unknowable and account for that in their financial plans. My friends did, and that’s one silver lining their loves ones and friends can seek solace in at this very painful time. God bless.

The author is a 2008 LIFE Lessons Scholarship recipient. Each year, the LIFE Foundation awards scholarships to college students impacted by the death of a parent. While the scholarship is helping the Western Carolina University sophomore fulfill her dream of attending college, her story underscores the need for parents to include life insurance in their college-funding plans. Click here to view her scholarship contest video entry.

Life is all about lessons. I learned this as a young child, and it is something that is still true now that I am a college student. Being an adult doesn’t change the fact that there are lessons to learn. It just means that the lessons get tougher..

I very distinctly remember a lesson my daddy taught me on the sidewalk as I was getting ready to practice rollerblading. I don’t remember exactly what I was talking about, but I’m sure it was one of my ever-popular childhood speeches about how I was going to become a princess someday. Of course, my daddy never told me that I couldn’t become a princess. In fact, he made sure I knew that, in his eyes, I already was a princess. But when I insisted that in order to be a real princess I needed a pony or a crown is when my daddy insisted that, due to financial limitations, I would have to make do with plastic dress-up crowns and My Pretty Pony dolls. This was the moment when I learned a very important lesson. “Everything in life costs money, Morgan,” my dad told me, “even rollerblading.” I, of course, being about 6 or 7 years old, insisted that there had to be something in life that did not cost money. “What about being born, daddy? Of course being born doesn’t cost money!” I argued. I was very good at arguing. My dad patiently corrected me, saying “Even being born costs money. Somebody has to pay the doctor and the hospital, buy the clothes that the baby will wear, and buy a car seat to take the baby home in.” Of course, being a childhood professional in the lost art of argument, the conversation continued for a good half hour before I was fully convinced that everything in life does costs money.

Even though I accepted and internalized this lesson, it was not until I was 11 years old that I fully realized the impact of what my daddy had taught me. One evening in October, just after I had started the sixth grade, I was waiting for my daddy to come home from work so he could take me up to bed. The doorbell rang and I opened up our home to the worst kind of disaster it would ever encounter. A police officer, in full uniform, asked to talk to my mother, and I knew right then that my daddy was gone forever.

The death of a parent is devastating to anyone, but it seemed especially difficult for me. I was the epitome of a “daddy’s girl”. I adored my daddy as if he were the sun the Earth revolved around, and losing him made it seem like the planet was falling off its axis. I remember sitting alone on the steps the next morning, while what seemed like hundreds of strangers filled our house. I was thinking about my dance lessons. Even as an eleven-year-old, I ate, slept, breathed, and dreamed dance. I felt like a bad daughter to be thinking this, but I was extremely concerned about how my family would afford for me to keep dancing now that my daddy was gone. I couldn’t have put it into words at the time, but I knew that my dancing was the only thing that would hold me together during the months and years ahead.

For as long as I could remember, my family struggled with money, the struggle being that there never seemed to be enough of it. When I was a child, we lived in various apartments and even my grandparent’s spare bedroom before moving into a small ranch house in New York. My clothes were never from the brand name stores where my classmates shopped, unless I was lucky enough to come upon their hand-me-downs at a garage sale in the richer neighborhoods. My mom decided to go to college when I was young, although we couldn’t afford for her to quit her job and go full time. So, my baby brother and I spent a lot of time at our grandparents’ or at our daddy’s work while my mom took night classes. We ate so many cans of spaghetti-o’s that to this day they have become a running joke in our family. My dad worked an average of three jobs at any given time in addition to being a dedicated volunteer firefighter. When I made the competition dance team, my dad took on extra odd jobs to pay for my lessons, including a janitorial position with the dance studio. Only six months before my daddy died, we moved into a new house which needed to be remodeled just to be livable. Putting all of these pieces together, it is easy to see how I became so convinced that my dance career was over.

While I was concerned with my dance dreams, my mom was facing ten thousand dollars in funeral, burial, and headstone costs, a house that still needed repairs, and the expense of raising and feeding two young children. My initial concerns about dance paled in comparison to the massive financial strain we were about to encounter.

Luckily, my parents understood the need to plan for the worst. Even though they were only in their 30s, they scrimped and saved in order to make sure they had life insurance. They hoped they would never need it, but they knew that they needed to prepare for the unimaginable. Because of their planning, we were able to have an honorable fireman’s funeral for my daddy. We weren’t forced to move out of our house, and I was able to keep dancing. Grief is not a time to make important financial decisions, such as selling a house, and having life insurance kept us from having to do that. Eventually, I was able to go to college. Life insurance didn’t necessarily pay for everything, but it did keep us afloat and out of debt so that we could better handle our needs. If it wasn’t for life insurance, I can only imagine the debt my family would be in and how different our lives would be. I certainly would not be in North Carolina attending college. Life, and death, is hard enough to handle without having to worry about where you will live, how you will pay your bills, or if your kids will be able to pursue their passions.

Even though I am only 19 years old, I know that as soon as I am out of college and have a job I will be signing my own life insurance policy. It’s not that I am planning on dying anytime soon; it is just that I would rather spend the money, and look back when I am 100 and be glad I never needed it, than to die when I am 30 and leave my family stranded. It’s just another one of those lessons that I learned from my daddy: Everything in life costs money. Always hope for the best, but be prepared for a change in plans.

Being that I work in the life insurance industry, my friends sometimes confuse me for an authority on all subjects insurance-related (and on investments too). I am a communications guy, I tell them. I don’t have a license to sell products or offer much in the way of useful personal finance advice. My job is to help consumers understand the basics of my industry’s products, such as what they do and why they’re needed, and how important the people—that is, insurance agents and financial advisors—are in the process of helping consumers figure out what they need and how much.

Recently, one of my friends came to my house and, between conversations about sports, travel and politics, he asked me an insurance question. His father had died, and he knew a portion of his father’s life insurance policy benefit was coming to him. Initially, my friend had no clue how, but then, by mail, the insurance company sent him a letter and a small booklet. It took his portion of the death benefit and set up an account that allowed him to draw down the benefit by writing checks to himself with the booklet provided by the company.

My friend wanted to know, “Jim, is this generally how people receive life insurance proceeds?”

I didn’t know much about this payment system, I confessed to him. I knew of cases when an insurance agent handed a check to a widow for the full amount of the benefit. In this case, I don’t think my friend’s father had an agent, and neither did my friend—which is why he posed the important question to me, and not a qualified professional. All I could do is suggest he call the insurance company to learn more about the payout system and his options.

Afterward I was curious enough to ask an expert, my boss, Marv Feldman, president and CEO of the LIFE Foundation, about how death benefit payouts are generally structured.

Marv told me that receiving a check book instead of a lump sum check is fairly standard in the industry now. If the beneficiaries want all the proceeds, all they have to do is write a check just like they would from their own checking account. What this does is give the beneficiaries time to think about what they should do with the money, and keeps them from making quick and rash decisions at a time when they are prone to making decisions with their emotions. And while the beneficiaries mull over their options, the money sits in an account earning interest comparable to most money market funds.

My boss also emphasized that beneficiaries should consult with a qualified insurance professional to determine how the death proceeds can be invested to maximize the returns and minimize the risk. Many times the best decision is to do nothing with the money for a short period of time until the family has a clear picture of what they want and need to accomplish. This allows time to put an action plan in place and follow it through to completion.

I’ll pass along a link to this blog post to my friend and hope he heeds Marv’s advice. Right now, he needs advice only an insurance professional can give him.

I was recently talking with a female financial advisor who is a member of Women in Insurance and Financial Services. She mentioned that by 2010, women will control 60% of the wealth in the United States. She also said jokingly that they will inherit the other 40%.

Here are several other interesting gender statistics from an Allianz study. The number of women earning more than $100,000 has quadrupled over the past 10 years, and women now make up half of all the stock market investors. But 90% of women feel somewhat or very insecure financially according to the Allianz study. 50% are worried about having insufficient funds to live comfortably after retirement.

This study also showed that women consulted the internet most, but trusted it least. Their preference is to talk to someone as opposed to reading about something. While women may feel insecure about their level of financial knowledge, they do not want to be talked down to.

The LIFE Foundation website, designed to educate and motivate the consumer, can address both the need for information and the ability to locate an agent who can guide them in completing their insurance needs and financial roadmap. All it takes is one click.

In yesterday’s Washington Post, there was an article that examined whether AIG policyholders should cancel their life insurance policies and annuities in light of the insurance giant’s near meltdown several weeks ago.

The Post interviewed various state regulators, and their advice to consumers appeared to be unanimous: “Stay put.” My wife and I own AIG life insurance policies and we’re doing just that.

The reason? The policies are extremely secure. When AIG appeared to be on the brink of collapse several weeks ago, there were several days when I couldn’t have proclaimed that with as much certainty. But now that the federal government has intervened, I don’t see any reason for concern.

It’s true that AIG’s life insurance companies were downgraded slightly by the major ratings agencies. But even with the downgrade, their ratings remain quite high compared to other major life insurers. Moreover, AIG’s problems never had anything to do with the health of the life insurance subsidiaries. Bad mortgage investments made by AIG’s holding company are what jeopardized the company.

Life insurance is a highly regulated business and companies are required to maintain very large reserves to meet future claims. If you’re like me and own an AIG policy, there’s no need to panic. Your life insurance policies are safe and secure.

The author will become the 11th president of Woodmen of the World Life Insurance Society/Omaha Woodmen Life Insurance Society on October 1.

One in five Americans would rather have a root canal than investigate their life insurance needs.

That’s according to research commissioned last year by the Life and Health Insurance Foundation for Education (LIFE). That statistic saddens me, but it doesn’t startle me.

Hard times have fallen on many Americans. People have to cut back on groceries to afford the drive to get them. Families are living, working and spending without a financial safety net. That makes life insurance more necessary than ever.

In the nearly 25 years that I have spent in the life insurance industry, I have met too many families whose breadwinners die – often before their time – uninsured. After the initial shock wears off and grief sets in, the bills begin to pile up. On top of coping with the loss of their loved ones, these now-single-parent families have to deal with surmounting debt, long work hours and radically different lifestyles.

For little more than the cost of a night at the movies per month, those families could have bought life insurance policies with death benefits that pay down debt, preserve their lifestyles and focus their attention on healing, instead of merely surviving, following unexpected loss.

Last year, LIMRA International, a leading industry research firm, reported that 68 million adult Americans have no life insurance. That’s sobering but even more so when you realize that three in four Americans say they consider life insurance a necessity.

September is Life Insurance Awareness Month, when heightened attention will be paid to life insurance awareness. I want to encourage families everywhere to visit LIFE’s Web site, where they can listen to the stories of real people who were thankful that they had life insurance when cruel circumstances redirected the course of their lives.

More than anything, I want to see uninsured families get the coverage they need. Purchasing life insurance before it’s needed is like going to the dentist for a routine teeth cleaning. If families begin to investigate their life insurance needs, I know they’ll see that preventative care is always more enjoyable than a root canal.

Anxiety. That’s what many people are experiencing over the current financial meltdown and concerns about AIG, one of the largest insurance companies in the world. According to USA Today, AIG issues more fixed rate annuities than any other company in the United States, and it is the ninth largest seller of variable annuities.

Should you be concerned about their current financial problems, and what should you be doing, if anything, if you own an AIG product? The answer to the first question is yes. Being concerned is understandable. But I have good news. It is the AIG holding company which has the problems. According to the state regulators, the AIG life insurance subsidiaries are highly regulated and well capitalized. Take it from Consumer Reports, which released an article this week that read: “AIG policyholders . . . need not worry that their claims will be denied.” With that being said, if you are holding a general account product and the insurance company fails, these cash values may be subject to the claims of AIG’s creditors.

If you own a variable account product, the underlying values invested in the subaccounts are segregated accounts and not subject to the claims of the creditors. They are, however subject to the changes in the market.

All of these products are protected by your state insurance guarantee association. While each state guarantee may vary, the typical amounts protected are up to $100,000 in cash values and up to $300,000 in death benefits.

So, back to the second question. What should you do now? First and foremost, don’t panic and make a decision based on emotions. Talk to your professional insurance agent or financial advisor to insure you are making an informed decision after reviewing all your options. If you don’t have an agent, go to the LIFE website’s agent locator and click on the agent locator to find an agent near you. The agent/advisor will help you make the decision which is right for you.

The author is president and owner of Agency Services, a life and health insurance brokerage general agency based in Memphis, and serves on the LIFE Foundation Board of Directors.

OK, you’re ready to finally sit down and buy that life insurance you know you’ve needed for some time. Maybe it’s a new home, your first child, whatever the reason, I’m glad you have taken the important first step in deciding that you need the insurance. Hopefully, you’ve had the benefit of professional advice from an agent, and maybe even used the life insurance needs calculator on www.lifehappens.org/lifecalculator.

You’re probably wondering, what’s this going to cost?

Well, the answer depends on several factors and being prepared BEFORE you begin the underwriting process will help you navigate the whole thing. Several important factors are “baked into” life insurance pricing:

1. Gender. Statistically, women live longer than men, so females generally pay less.
2. Age. Things get better with age – or so the saying goes. Except when buying life insurance. The older you are when you buy, the more it’s going to cost you.
3. Smoking. Smokers (and all tobacco users) often pay more than two times more life insurance than non-smokers. Don’t like this? Quit smoking, lay off it for 2-3 years and your rates will reduce dramatically.
4.Other factors. Most insurance companies have several price points in categories such as “ultra preferred”, “preferred”, “super-standard” and “standard”. Besides things like age, gender and smoker status, insurers analyze other important factors such as:

If this all sounds too confusing, it doesn’t have to be that way. Working with a professional advisor, you can get a pretty good idea of how your price would be calculated. Be sure to be completely honest when you discuss things. Thinking that “it’s OK to only tell the agent or the company the things they want to hear” won’t work in the long run. All insurance companies independently verify your past medical, financial and family history during the underwriting process. Almost always, you can expect to be required to submit to certain physical examinations, blood and urine tests. You can expect the process to be thorough and complete. After all, you’re often asking the insurance company to enter into a multi-hundred thousand dollar (or greater) contract with you. Think of underwriting as “due diligence” by the insurance company. You’ve done the same in selecting which carrier you want to do business with!

If you have certain pre-existing or ongoing medical issues, don’t give up. Certain carriers even specialize in handling what’s called “hard to place” risks. Experienced insurance agents know the carriers and which specializes in what. Don’t make a mistake and overpay for coverage. For example: something as simple as smoking only cigars can make a huge difference. Some carriers offer cigar smokers “smoker” rates. Others offer more competitive “non-tobacco” rates.

Check out the opinions from LIFE’s most recent survey about what factors affect life insurance pricing. Click here to read my responses to five fictional carriers applications for life insurance and what each of the following (George Jetson, Batman, Popeye, Fred Flintstone & Elmer Fudd) might pay for life insurance.

The LIFE Foundation also produced a report on underwriting that you may also find useful. To read it, go to www.lifehappens.org/costofcoverage.

If you’re an AIG policyholder, as I am, the news of the past two days has probably been a bit unsettling. This is a crisis that is playing out minute by minute, and we all need to stay tuned to figure out what the long-term impact will be on the overall financial markets and our own personal financial situations.

Here’s what we can tell you. If you own an AIG life insurance or annuity product, there are protections in place to safeguard your policies. They’re called Insurance Guaranty Associations, and they offer a safety net—-nationwide—-to provide protection to insurance policyholders for their guaranteed contract benefits. All states, the District of Columbia and Puerto Rico have insurance guaranty associations. Insurance companies are required by law to be members of the guaranty association in states in which they are licensed to do business.

The following “Questions & Answers” provide some additional details:

How do Insurance Guaranty Associations work?

When there are insufficient assets in an insolvent insurance company to pay policyholder claims, the Insurance Guaranty Association provides funds by assessing member insurers that write the same kind of business as the insolvent insurer. These assessments are used to pay, up to statutory limits, the covered claims of policyholders of the insolvent company or to provide continued coverage for the policyholder.

What are the statutory limits on covered claims?

The amount of coverage provided by the guaranty association is set by state statute. Although states’ laws differ as to dollar amounts covered by their guaranty associations, nearly all states have enacted a version of the National Association of Insurance Commissioners (NAIC) Model Law, and provide coverage for life, annuity, and health insurance at limits of at least:

There also is an overall cap for any one individual of $300,000.

How are guaranty association activities coordinated when an insolvent company does business in multiple states?

All state guarantee associations are members of the National Association of Life and Health Guaranty Associations (NOLHGA). In the case of an insolvent life insurer that has policyholders in multiple states, the activities of the state guaranty associations involved are coordinated by NOLHGA. NOLHGA provides resources and technical expertise to the state guaranty associations as well as a national forum for discussion of state guaranty association issues.

The bottom line is this: If you own an AIG policy, chances are that you’ll be just fine. Hopefully, AIG will emerge from the current crisis and shore up its capital position over time. Alternatively, it may sell its life and annuity business, in which case you’d be covered by a different carrier. In all likelihood, your policy(ies) will be honored in full, even if the face value or cash values exceed the limits outlined above. Only under the most dire of scenarios would the cap limits be applicable.

So while the news is understandably unsettling, it’s important to recognize that there are protections in place to safeguard your assets.

During the month of September, the LIFE Foundation spearheads Life Insurance Awareness Month (LIAM), an industry-wide effort to raise the public’s awareness of the importance of life insurance to their families and businesses. What I’d like to do in the midst of the education campaign is to point out the life insurance industry’s importance to the American economy.

Let’s review some revealing statistics provided by the American Council of Life Insurers (ACLI). The insurance industry is one of the leading sources of new investment capital in the United States, but many of you may not realize just how significant these dollars are.

Life insurers have invested $4 trillion in the U.S. economy, including $1.2 trillion in new net investments in the five-year period between 2002 and 2006.

Life insurers are the largest source of bond financing for corporate America, and have been since the 1930s, with $1.9 trillion invested in 2006.

At the end of 2006, life insurers held over $579 billion in government bonds, which help fund urban renewal and support America’s infrastructure.

The industry holds about $314 billion in commercial mortgages and provided $58 billion in new financing to the commercial mortgage market in 2005.

Much of this investment helps life insurers to provide the products that protect against life’s uncertainties, helping individuals and families manage the financial risks of premature death, disability, long-term care, and outliving their savings. Life insurers have paid out billions in life, disability income, long-term care insurance, and annuity benefits–offering peace of mind, security and dignity to Americans when they need it most.

Beneficiaries of life insurance policies received $56 billion in death benefits in 2006.

Life insurers paid $71 billion in annuity benefits in 2006.

Life insurers paid $3.4 billion in long-term care insurance benefits in 2005.

Life insurers paid out $6.3 billion in disability benefits to replace lost income in 2001 (the most recent data available).

As we head into the final weeks of LIAM, know that we in the life insurance industry are proud of the impact we have had in providing security for individuals and their families, keeping family run companies together, providing benefits through employers and providing the investment capital which helps keep our economy running.