10/01/2019
Life Insurance Myths
1. I am young....
Although you may not have started your own family, you may provide or receive support from family members, and you don’t want to create a financial burden for them should something happen to you.
That’s why life insurance can make sense. It can help:
Replace your income to support loved ones who depend on you
Provide for children
Cover burial costs and other final expenses
Pay off your debt, especially student or car loans for which a parent may be a co-signer
2. I have Life Insurance through my job, that's enough......
A life insurance policy provided through your job is a great benefit, but it may not provide enough protection for you and your family.
Life insurance from your employer, called group term life insurance, is offered for free or at a low cost, and typically provides basic coverage of at least one year of your salary. Some employers offer inexpensive supplemental life insurance of one to three times an employee’s salary. Usually, a medical exam is not required.
The disadvantages of this coverage are:
No Portability: In most cases, your coverage from a group life insurance policy ends when the job ends. In circumstances where you can continue the coverage, you are responsible for the entire cost, and you may have to take a medical exam.
No options: Your employer determines the features of the life insurance policy, so you may be missing out on a product that better suits your needs.
3. Life Insurance is Expensive ........
What’s stopping people from getting the life insurance protection they need? That pesky little myth that it costs too much.
When asked how much a $250,000 term life policy would be for a healthy 30-year-old, most people estimated $500 per year – more than three times the actual average cost of $160
4. You don't need life insurance if you're single ......
Even if you’re not married, life insurance can be part of a sound financial strategy. If you have loans, a mortgage or debt with a co-signer who would be responsible to complete the payments should you be unable to, then a life insurance policy can help ensure that these expenses are covered.
And, it can help you avoid leaving end-of-life expenses, such as burial costs, to your loved ones. You may even have a significant other, aging parents or a charity to whom you’d like to transfer wealth or leave an inheritance.
Life insurance can also help you protect the family you may have in the future. If you’re in good health, a policy you purchase today can potentially be less expensive than if you wait to purchase one after you marry and start a family
5. Only the primary income earner needs life insurance ......
Protecting your family with life insurance means not just having life insurance coverage for the primary breadwinner but also for the loved one whose labor – whether it’s inside the home, outside the home, or both – also contributes to the family’s well-being.
That means that every secondary breadwinner should have life insurance. Why? Because if they were to pass unexpectedly, what would it cost a household to:
Replace the income of the secondary income earner?
Cover the long-term expense of raising a child, which can include paying for the child’s education?
Pay for home expenses?
Help pay off a mortgage?
Money can’t replace a loved one and all that they do, but it can make it easier to move on after an unexpected loss.
6. You can't get life insurance if you have serious health conditions ......
You can still protect your family. People with elevated blood pressure, diabetes or other chronic health conditions can often find a life insurance provider who will provide coverage. Even cancer survivors, especially those who have had five years since successful treatment, can purchase life insurance. *premiums may be higher*
7. My children are now adults, I don't need Life Insurance ......
If you’re an empty nester exploring a different financial strategy, here are some things to consider:
Would your spouse/partner be able to maintain their lifestyle if you were to pass away unexpectedly?
Have you paid off your mortgage?
Would your aging parents have the support they need if you were suddenly no longer around to help provide for their caretaking?
Do you have an estate plan to provide a legacy for your family?
Would you have the savings you need to pay for your funeral and other final expenses?
8. It's better to save than to have life insurance ...
How many times have you heard the myth that it’s better to save than have life insurance? The truth is, life insurance can be as vital to your financial strategy as your savings, because life insurance can protect your family and the wealth you’ve built. For example, if you were to pass away unexpectedly, it can help:
Cover financial obligations, such as outstanding credit card or student loan debt
Pay for funeral and other final expenses
Cover mortgage payments
Pay for your children’s education
Enable your loved ones to maintain their lifestyle
