Life Insurance Myths
Life insurance is not required by law like many other types of insurance, and many people choose to forgo these policies. However, it can be an extremely valuable investment in your financial health and that of your family. Let’s clear up some of the life insurance myths.
Only the elderly need life insurance
Life insurance policies are more affordable for younger applicants! Don’t be fooled by this mythIt makes the most sense to purchase earlier rather than later. Many term life insurance policies are also made with the option to be rolled over into whole life policies once the beneficiaries are older.
It’s too expensive
Polls show us that this myth is so pervasive that over 50% of people overestimate the cost of life insurance. Just like with other types of insurance, policy cost is determined based on age, driving record, health, gender, etc. so there is a lot of variation in plan premiums. There are many affordable options for life insurance that can fit your budget.
If you don’t work outside the home, you don’t need it
Life insurance policies aren’t just about covering lost wages. That is one of the life insurance myths. They’re about being able to replace critical work, including domestic work. A stay-at-home parent can be a driver, tutor, cook, day-care, cleaner, and babysitter that goes uncompensated. If that person were to pass away unexpectedly, all of those roles would have to be replaced and compensated.
I have group life insurance – that’s enough
Some people get group life insurance through their work. But what happens if they’re laid off, or the company goes under? In addition to that risk, many employer-provided policies offer only several thousand worth of coverage, which wouldn’t put much of a dent in more than funeral costs.
Personal savings is the same thing – life insurance myths
Personal savings can be a great thing to have, but it is not the same as a life insurance policy. For one thing, personal savings can often be easily drained with one unexpected hospital stay. For another, there is no need to limit the amount of support a family receives after the death of a loved one. The more financial support there is, the fewer things there will be to worry about during that difficult time.
I can’t buy life insurance with my pre-existing condition
Do not fall prey to this life insurance myth. If the pre-existing condition is minor or the beneficiary is managing the condition with medical treatment, there are many policies to choose from that will simply charge slightly more for coverage despite that condition. There are also guaranteed issue policies, which guarantee coverage without any disclosure of medical history or exam, meaning that they will be more expensive, but provide the coverage regardless of pre-existing condition.
Life insurance can be a powerful tool in planning for the financial security of a family, and it’s helpful to understand exactly what it is and what it can do before making any decisions about it. Don’t let any life insurance myths confuse you.
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