American Debt in 2022

March 11, 2022

For many Americans, debt has always been an issue. Between mortgage payments, student loans and credit card bills, it’s easy for families to find themselves between a loan and financial hardship. Still, the severity of that hardship, and the number of Americans suffering from it, have drastically increased over the last few years. Even as a nation, the U.S. has seen unprecedented levels of debt and more and more families having to dig themselves out of a financial hole.

As a life insurance agent , there are several insurance products that you can offer to your clients as a solution to tackling debt. Debt is something we all face, and with that in mind, there is a type of life insurance that can help your clients overcome their financial hurdles and become debt free. Here we will break down the increase in debt we’ve seen as a country and some products your clients could benefit from as a result.

National debt

As of January 2021, the national debt for the U.S. exceeded $30 trillion — the highest it’s ever been. The national debt has been on the rise for decades now, but the recent COVID-19 pandemic has increased the pace of that growth. In 2021, the federal government made $562 billion in interest payments to that debt, and while there are efforts to resolve some of that debt, it’s clearly not being resolved fast enough to put some brakes on the steady accumulation due.

Not only does the national debt impact the country’s economic future , but it also affects the financial well-being of many American families.

American families’ debt

This increasing national deficit played out on a smaller scale for millions of American families . Even though many Americans used the pandemic to pay down debts and put more toward savings , growing inflation caused by the national debt has put many into a fiscal quagmire. In 2021, credit card debt increased for Americans by $70 billion , a huge jump from a 10-year average of $45.6 billion.

Between mortgages, student loans and expensive credit card bills, Americans are struggling with debt more often and at higher amounts than ever before.

Using life insurance to tackle debt

The rising case of debt in America is a financial hurdle that your clients will undoubtedly have to deal with. With that in mind, finding an insurance solution that helps them tackle their debt can be a huge benefit for their financial future.

For instance, for a family that has a significant mortgage loan, you could offer an affordable mortgage protection insurance policy, which would take care of their mortgage payments if they were no longer able to contribute to payments due to injury, disability or death. If instead, they are interested in setting up long-term coverage with a permanent life policy, you might help them find a policy with a cash value that they can set aside to pay off student loans before retirement, or to fund a child’s education later in life. The first step is understanding the growing need for solutions to debt and the second step is finding out which insurance policy is the best fit for your clients.

Mortgage protection insurance: financial protection for the home

Mortgage protection insurance is a great example of a life insurance product that can protect your clients from financial hardship caused by debt. A type of term life insurance, mortgage protection is designed to last for the length of your client’s home loan. The coverage is usually for the full amount of the client’s mortgage, and if they were to experience a death, disability or critical illness covered in the policy, the insurance company would provide a payout to pay off the loan.

Mortgage protection insurance would ensure that - despite the amount of the home loan - your client’s family would be taken care of no matter what happens. They would not lose the house if a death, illness or disability prevented them from continuing to make payments on the mortgage.

Cash value with whole life insurance

Alternatively, you could discuss a whole life insurance policy with your clients. This type of coverage comes with a cash value component that could be a great benefit to anyone worried about debt. If you have a client who is worried that their student loan payments will prevent them from saving for retirement, they would be an ideal candidate for utilizing the cash value of a whole life insurance policy. That cash value will continue to grow while the policy is in force. Your client can then make partial withdrawals, take out a loan or even surrender the policy and receive the cash value as a lump sum.

At a certain point, the cash value of the life insurance policy is even able to pay the premiums for the policy itself. With that in mind, a whole life insurance policy would be a great fit for clients who are worried about debt.

Guide your clients toward a debt free life

Symmetry’s Debt Free Life solution acts as a whole life insurance policy that uses the cash value of the coverage to help your clients eliminate debt. Symmetry agents are required to become certified in selling this product as it requires specific knowledge on how the debt payoff plans work.

Once certified, Symmetry agents can offer their clients this simplified payoff program that can help them eliminate all their debt in just a few years. Debt Free Life is a modernized approach to paying off debt. It harnesses the power of a whole life insurance policy to help your clients eliminate debt in less time so that they can focus on financial goals like retirement and buying a home.

Learn more about Debt Free Life

Help your clients tackle debt with Symmetry Financial Group

As a life insurance agent, you can help your clients get on track to being debt free by finding the best life insurance solution for their budget and needs. Whether they’re hoping to protect home payments, invest in the future or use the policy to pay off their debts, there is a product that can help them achieve a debt free life.

Symmetry Financial Group agents have access to high-quality life insurance, disability income insurance, critical illness insurance, and annuity products from more than 30 well-known insurance companies. This gives you the flexibility and reach you need to tailor plans to meet clients' individual coverage needs.

To learn more about how to begin a fulfilling career as a life insurance agent, contact us today .


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