Life insurance is an important foundation of any well-rounded financial plan.
Are you uninsured or underinsured like a lot of others because you believe a myth? According to a Limra survey…
Three in ten American households (35 million) are uninsured and half say they need more life insurance.*
More than half of Gen X and Y households – representing 30 million people – need more life insurance. *
One-third of wives own no life insurance at all – despite the fact that 7 in 10 households are dual-income
households, and nearly 30 percent of wives earn more than their husbands.*
Here are 7 myths about life insurance.
Myth 1: Single and young people don’t need life insurance.
Truth: Ask yourself: Are there financial obligations I need to meet if I’m gone?
Even if you have no dependents, you’ll likely have funeral expenses and most people get sick before they die. The modern kind of life insurance have no cost riders that provide access to funds if you develop a critical or chronic illness and live but need cash to cover financial obligations or uncovered costs while you recover.
Buying while you’re young can help you lock in lower rates and guarantee coverage if you develop health problems later in life.
Myth 2: Only people with kids need life insurance.
Truth: It is most likely your spouse depends on your income. Could he or she manage to pay the mortgage and all other household bills and debts alone? Would he or she need time and resources to go back to school or train for a new career?
A life insurance policy could help your partner maintain his or her standard of living and take the steps necessary to move forward.
Myth 3: If your employer provides coverage that is enough.
Truth: Many corporations provide their employees with free life insurance worth one or two times their annual salary. The military does too. It is a nice benefit but if you leave or get downsized from your company or leave the military without a separate policy in place, it may be difficult, likely will be more costly since you will be older, or you may be uninsurable at that point if you have recently had a significant health issue.
Myth 4: Life insurance is too expensive.
Truth: It probably costs less than you think. You trade pennies for dollars to use when you or your family need it the most. As an example a healthy 30 year old male may qualify for a 30 year term policy that pays out upon death or diagnosis of a critical, chronic, or terminal illness for as little as a dollar a day. One caution…beware of advertisements you see on TV that seem too good to be true. Pause your TV and look at the fine print. Most quote a 10 year term policy for a 25 or 30 year old which may not be a good choice or your case. Be sure to note that the insurance carriers pay the agent, you won’t, and the policy will cost the same whether you go through a carrier’s call center , get it directly online , or have an agent guide you through the search.
Myth 5: Insurance policies are all the same.
Truth: There are a variety of different types of coverage, and even policies that have similar names may differ substantially in what they offer. So before you buy based on price alone, speak with an educated insurance agent. It may be beneficial to choose one that is not “captive” to one insurance carrier so they can shop around for you. You don’t know what you don’t know and a seasoned and caring professional will ask you questions you may not have considered that will help you determine the coverage you need. Many will provide a complimentary financial needs analysis and will supply quotes from several carriers that may fit your specific situation.
Myth 6: There’s no reason to insure a stay-at-home spouse.
Truth: Your stay-at-home spouse may not earn an income, but think of all he or she does to keep the household running: child care, meal preparation, transportation, housekeeping and more. With that spouse gone or incapacitated, life suddenly gets a lot more challenging — and expensive. Life insurance can pay for hiring help or changing jobs or work hours to accommodate a new lifestyle in your partner’s absence or health crisis.
Myth 7: Buy it once and you won’t have to think about it again.
Truth: Life insurance isn’t once and done. Every significant life event — marriage, a new baby, increasing income or assets, divorce (oops, there go the assets), buying a house, retiring — should remind you to call your agent or review your coverage. Even if you’ve had no big changes, it’s also smart to review the policy every year or at least every few years with your agent to ensure that you’re keeping pace with inflation and still getting the best value for your premium dollars. Many people today still have not updated their policies and are paying for the old fashioned life insurance that only pays a beneficiary upon the insured death. Are you among them?
For help determining the best policy for you email Bonnie@Rocksolidwealthdesigns.com or call 951-878-9010.