There are many reasons that people avoid shopping for life insurance. Sure, thinking about your death isn't a pleasant way to spend your time. Beyond that, there are many misconceptions about life insurance policies that hold people back. In fact, according to the 2016 LIMRA Insurance Barometer Study, only 17 percent of those surveyed indicated that they were planning to purchase a life insurance policy in the next year. Here are just five busted myths about life insurance and the facts on this important coverage.
Myth 1: Life Insurance is Expensive One of the biggest misconceptions about life insurance is its cost. In a previous Life Happens surveys, 80 percent of the participants overestimated the cost of a life insurance policy. This is especially the case for Millennials, who overestimate the cost by an average of 213 percent. Life insurance is surprisingly affordable. For example, a 20-year, $250,000 term policy for a healthy 30-year-old male could be as low as $13/month.
Myth 2: Employer-Provided Group Coverage is Sufficient Group life insurance coverage through your employer is a fantastic benefit, but it is rarely sufficient. Usually, limits are set at one to two times your base salary, sometimes with the option to increase coverage. Even with this option, and the total coverage may still not cover your actual needs. If you leave your job, the insurance doesn't go with you. Also, group coverage isn't always the best deal for a life insurance policy as you may be able to find better rates, and more stable coverage, on your own.
Myth 3: Only Primary Breadwinners Need Life Insurance This idea that only the primary breadwinner needs life insurance is a dangerous misconception. What if something were to happen to the secondary breadwinner or the stay-at-home spouse in your family? That primary breadwinner would then need to replace that income or hire someone to take care of the kids and manage the home. Everyone who adds value to the home needs a life insurance policy.
Myth 4: If You're Single, You Don't Need It Being single doesn't eliminate your from need for a life insurance policy. In fact, there are many reasons why someone who is single would want to purchase life insurance. If you are a single parent, you absolutely need a life insurance policy to guarantee the future financial security of your children. If you plan on getting married, starting a family, or worry about future health issues, buying an insurance policy while you're young is a better option. This way you can lock in both low rates and eligibility. Finally, insurance policy benefits can pay for burial expenses, any co-signed debt left behind, and even ensure the survival of a small business.
Myth 5: A Term Life Insurance Policy is Always Best While a term life insurance policy generally makes sense for most people, it's not the best choice for everyone. You may decide that you need a permanent life insurance policy for a variety of reasons. If you have an adult child with disabilities who will need long-term care or if estate taxes will be an issue, it would make more sense to have a permanent life insurance policy. Also, if you wish to protect your coverage eligibility or have a policy with a cash value component, this might be a wise choice.
While every person's life situation is unique, there are few people who don't need some life insurancel. When you make your decision about purchasing a life insurance policy, be sure that it is an informed choice and know that it is always best to buy a policy sooner rather than later. Contact us to complete a simple needs assessment or to request a quote now.