Life insurance is a very important part of any long term planning, but there are a lot of misunderstandings about what life insurance can do for you and when you should purchase it. These life insurance myths can end up costing families big, and usually when they realize it, the chance to get the coverage they need has passed.
It’s Only For The Rich
A lot of times when you see life insurance explained, the insurance agencies use figures and terms that seem completely out of reach. “I’ve got a million dollars in assets, do I still need life insurance?” We won’t lie, there are times where life insurance can be more beneficial for wealthy policy holders, but these types of articles and figures can make those with more humble assets feel like life insurance is completely out of reach. The fact is there are life insurance options for almost everyone, and from estate planning to the thought of leaving loved ones without income in the event of your death, insurers can customize coverage to meet your needs.
Investment Is A Better Strategy Than Life Insurance
Life insurance, like all insurance, is a form of protection against unforeseen risk. If you pass away and you’re no longer able to provide for your family, life insurance will help them pay off bills, the costs of your funeral, etc. It follows that some people think taking the money you pay towards premiums and simply investing it will give you the money you need anyway, so why bother with life insurance.
This life insurance myth is very common, but just like any sound investment strategy, you need to diversify your assets. Relying solely on savings could leave your family short on the money they actually need, especially in the event of an accident that happens before you’ve saved enough to cover all the costs. The better strategy is to save some money but also devote some towards life insurance. This way you’re fully covered and have multiple options to get you through a financial crisis if a family member passes on.
Only Those Who Are Married Need It
Most people tend to only look at life insurance once they are married. The consequences of their untimely death is easily grasped when they look at their spouse and children. However, even when you’re single, there are still costs to be covered if you pass away. Burial costs can be expensive, and without life insurance, you’ll be shouldering others with those costs. Many single individuals also have parents who have become financially dependent on them to some degree. A life insurance policy ensures they will be protected should you pass away unexpectedly. Single business owners will also want to add life insurance as there will be costs to cover when they can’t run the business anymore.
My Employer’s Life Insurance Has Me Covered
Those who already have a life insurance policy through work tend to overlook investigating additional coverage. Why would they need an independent life insurance policy when they already have one through their employer? There’s no doubt an employer policy is better than nothing, but don’t count on it paying out enough to cover all your costs. Even if your employer’s policy has a decent pay out, circumstances can always change, and their coverage won’t follow you if you leave work voluntarily or are fired. The wise plan is to supplement any employer life coverage with some coverage of your own.
I’m Healthy, I Don’t Need It
The confidence that comes when someone is healthy is another big life insurance myth. Why would you need a life insurance policy, the doctor says you’re fit and healthy. Fact is, you can never quite anticipate what might happen. Even if you’re perfectly healthy for years and years to come, life insurance costs far less when you’re younger. If you start earlier, before you’re middle aged, your monthly premium costs will be much lower. As time goes on, often times most people are glad they got the cheaper coverage earlier, because eventually they will really need it.
Dispel The Life Insurance Myths – Contact Square State
One final life insurance myth – there are too many options for someone to understand exactly which coverage they need. While life insurance can be confusing to some, Square State Insurance is here to help you evaluate your current situation as well as what coverage makes sense for you today. Don’t be afraid to investigate your options, even if you’re not quite ready to get coverage right away. Contact us at Square State Insurance and we’ll help you through the intimidating process of selecting life insurance coverage.
Images one and two courtesy of Wikimedia Commons.