SAFECO Urges Planning for Life.

Business Editors

REDMOND, Wash.--(BUSINESS WIRE)--Oct. 18, 2001

All over the country, Americans are coping with the uncertainty that has been so suddenly injected into their lives.

For many of us, it is imperative the uncontrollable certainty of death be balanced with certainties that are within our control. You may find yourself asking, "If my life ends suddenly, how would my plans for the future be carried out? How would my responsibilities be fulfilled?"

To answer these questions, life insurance agents everywhere are urging their clients to look at the fundamental purpose of life insurance -- to provide money to those who rely on you financially, when you die. This could be your immediate family, an aging parent, or your business partner.

According to the Federal Reserve's analysis of its Survey of Consumer Finances, 69 percent of families owned some type of life insurance in 1999. Kirkland, Wash.-based SAFECO independent agent John Storbeck helps insure some of these people. Storbeck says, "I'd be hard-pressed to find someone whose death would not create a financial hardship on someone else. There are very few Americans with no dependents or no debt. And after many years in the business, I have yet to talk to a beneficiary that felt dollars spent on life insurance were a waste of money, or that they bought too much."

Substitutes Can Mean Liquidity Problems

Consumers who have chosen not to buy life insurance may instead plan to use other financial resources to protect their dependents. However, if this money is tied up in investments and their death occurs during a downturn in the market as we're experiencing today, the beneficiaries could face economic hardship. This is an especially salient point for America's aging Baby Boomers who are well aware that death is no longer a matter of "if," but "when."

Plan for Today

In trying to determine whether or not you need life insurance, Brenda Randall from SAFECO Life & Investments Marketing says, "Consumers should ask themselves this question: If I died today, is there anyone who would be impacted financially? Then, perhaps the most critical step is determining an appropriate death benefit amount. Don't plan for what you'll need 10 years from now, since a lot can change between now and then. Your kids may be grown in 10 years, so you may not need as much insurance. But today you do, so plan accordingly."

Based on information from the American Council of Life Insurers, in 1999, the average amount of life insurance coverage per insured household was only $189,800. This wouldn't even pay off a fairly typical $200,000 mortgage, which is often not a family's only financial obligation. When assessing the amount of life insurance you need, consider factors such as final expenses, mortgage payoff or rent, credit card debt, auto loans, college tuition, and continued income for dependents. There are many Web-based calculators to assist you with doing a life insurance needs analysis. Check out www.safeco.com/safeco/planning/tools.

An Accidental Death Rider Can Be Risky Business

Randall points out that life insurance customers often purchase a coverage amount that is less than what they need, but try to compensate by adding an accidental death benefit (ADB) rider, which typically doubles the face amount if death is the result of an accident. "The problem with this," Randall says, "is that if the insured person dies of another cause, such as illness, only the basic death benefit is payable. For virtually the same cost, forget ADB, apply for the amount you actually need and have peace of mind knowing you're adequately insured."

The problem with adding an accidental death rider and buying less coverage is evident in the three leading causes of death from 1995 to 1998. The Centers for Disease Control and Prevention cited heart disease, cancer and cerebrovascular (e.g., stroke) as the top three. Since the chance of death from disease is higher than from an accident, adding ADB to a life insurance policy is a gamble.

Randall concludes, "The analysis that goes into buying a life insurance policy can be intimidating for some, and contemplating your own death is even more daunting. But unlike auto or homeowners insurance where you get a second chance to buy the insurance after an incident occurs, with life insurance you don't get that second chance." Randall recommends that consumers contact a SAFECO independent agent or advisor in their area who can help make the process easier by offering advice along the way. You can also quote and purchase insurance on the Web. For a term insurance quote, visit http://www.safeco.com/safeco/quote.

SAFECO Life Insurance Co. was founded in 1957. In July 1999, SAFECO Life and SAFECO Mutual Funds announced a marketing partnership through which the companies sell their combined product lines as SAFECO Life & Investments.

SAFECO Corporation (Nasdaq:SAFC), in business since 1923, is a Fortune 500 company based in Seattle that sells insurance and related financial products through more than 17,000 independent agents and financial advisors. SAFECO is ranked as the 12th largest property and casualty insurance carrier in America, and is rated "A" excellent (3rd largest of 15th) by industry analyst A.M. Best and "A+" strong (5th highest of 21) by Standard & Poor's. To learn more, visit www.safeco.com.