Advisors should be able to walk their clients through the details of life insurance, which can be a critical part of a portfolio, said Adam Winslow, CEO of Life Insurance at AIG Life and Retirement.

With the riders that can be added to a policy, life insurance can help fund a successful retirement, Winslow said in an interview. Life insurance can be used to pay for health-care costs and long-term health care, and can provide a fund for cash withdrawals, but many people who hold life insurance policies do not know what their policies are worth or what they can provide.

“This is a classic education gap,” Winslow said. “People are under the misconception that life insurance is complicated. The role of the advisor is to provide education to help the client determine the right amount of protection. The advisor needs to ask the client what happens if he or she lives longer than anticipated, or not as long as expected.”

Life insurance can pay for the costs of critical illnesses or provide a cash value, all of which can be helpful in retirement, Winslow said.

According to AIG research, one in four life insurance holders does not know the value of their own individual policy, and an equal number do not know the value of their spouse’s policy. The research was based on the answers of 2,201 people.

“More Americans are afraid of chronic illness than outliving their savings or dying at a young age. Yet the majority don’t understand the cost implications or that permanent life insurance can be used to cover these costs,” AIG said in a statement. People know that life insurance can help family members when the holder dies, but “most are unaware of the many ways life insurance can help them throughout their lives with few spotting benefits such as saving for the future or taking out a loan.”

A knowledge gap exists even for policy holders. Twenty-eight percent did not know the value of their workplace policy, and 25% did not know the value of their own individual policy. More than half said they did not know whether the death benefit for term life insurance is set at a fixed amount or if it changes over time. Nearly all term life insurance purchased in the U.S. is level term, where the size of the policy stays at a fixed level for the length of the policy.

Forty percent of respondents said the cost of a chronic illness is one of their top concerns. Living benefits of an insurance policy could help alleviate those concerns, AIG said.

Three-quarters said they did not know permanent life insurance can be used to cover long-term care costs. This can be achieved several ways, including accessing the policy’s cash value, taking out a policy loan or through a rider, such as a chronic illness rider, that allows a policy owner to access a portion of their death benefit while still living.

AIG said people are starting to understand more about insurance and who needs it. Ninety percent said they believe stay-at-home parents can benefit from life insurance, and 80% believe that the primary earner should not be the only household member with life insurance.

The research showed that people who work with a financial advisor are more likely to have a life insurance policy.