All too often, clients come to me with strong assumptions about life insurance. These assumptions can lead to some of the biggest mistakes when purchasing a policy. Learn more about the biggest life insurance mistakes, here.
Now, let’s dig deeper into the misconceptions surrounding life insurance. Do you really need it, with your unique life circumstances? Will it be too expensive?
Let’s end the confusion and separate fact from fiction. Here are some of those myths I hear most often when helping clients select a life insurance policy.
Myth 1: “Life insurance is too expensive.”
The Reality: Life insurance can actually be very affordable. Sometimes, it is a matter of searching the right markets. Other times, it is about the right type of policy (term vs. whole vs. universal).
Instead of assuming you can’t afford it, let’s sit down together to see what makes sense. It doesn’t hurt to get a quote from our office. And I would argue that it is perhaps the cost of NOT having a policy that you can’t afford in the long run.
Myth 2: “Young, healthy people don’t need life insurance.”
The Reality: First of all, you really never know when tragedy can strike. Sadly, very young people are taken from this earth every day for a variety of reasons. Parents should insure children as soon as they are born to protect the family’s financial future, as a “just in case” policy.
Additionally, the younger you are when you seek your first policy, the lower your monthly premiums most likely will be. It is very smart to lock in a low rate at a young age and keep the policy long-term so your monthly costs remain affordable.
Myth 3: “Stay-at-home parents don’t need coverage.”
The Reality: While half of your household may not draw a salary, the price of losing the stay-at-home parent is great. The value you bring to the family’s childcare and household management needs would leave a big hole. In addition to the mourning and loss, your family would face costs that are significant to replace what you bring to the table.
Don’t think that lacking a paycheck means you don’t financially balance the household’s budget. Everyone under your roof should have life insurance!
Myth 4: “My work life insurance is enough.”
The Reality: Typical employer-offered policies are at the bare minimum of payouts. Often, the payout is only one to two times an employee’s salary. While this may help for very short-term solutions, it is often not enough.
Additionally, these policies are not portable, meaning that should you leave your job for any reason, you would immediately find yourself without coverage. Having your own, self-purchased plan to supplement an employer-offered policy is always best.
Myth 5: “Life insurance is just a death benefit.”
The Reality: Some life insurance policies build cash value and can be worth far more than a one-time payout to cover funeral expenses. In addition to lasting for your loved ones beyond the immediate needs of burial or cremation, a policy can also add to your financial portfolio while you are living.
Often, policies that build value can be used for emergencies and even retirement planning. Don’t look at a policy simply as a funeral-cost-coverage plan! There is far more it can do for you as part of a sensible financial plan for the future. Talk to an agent to learn more.
Myth 6: “I can’t get coverage if I have health issues.”
The Reality: Many conditions are still insurable, no matter what your health status. Some offer a guaranteed issuance, and many companies now have simplified underwriting options. A good agent will most likely find something for you!
Plus, when you work with an independent agent, you have many more options. I can search near and far for the policy that is just right for your unique needs. Having a health condition does not necessarily exclude you from owning a life insurance policy.
Myth 7: “Single people don’t need life insurance.”
The Reality: You still need life insurance, even if you’re single. Even without a significant other, someone, somewhere will need to cover your final expenses. There will be debts. There will be arrangements.
Whether it is family, parents, or friends, it is still a responsible and sensible move to obtain a policy today. Don’t leave those who care for you, in any way, financially on the hook for your needs.
If you have more questions or concerns, feel free to reach out. Learn more about what I can do to help you feel confident about your life insurance decision!
