Life insurance is likely the most important piece of your financial portfolio you should own. Most people aren’t truly aware of it benefits, other than the obvious (the death benefit).
There are several misconceptions about life insurance that can cause people to overlook this critical type of coverage and understanding its true value. In this article, we will discuss the top 6 most common misconceptions about life insurance.
- It’s too expensive. The cost of life insurance varies depending on a number of factors, including age, health, build, tobacco use, and the amount of coverage you need. While it is true in some cases, insurance premiums can be a significant expense. Although, the cost of life insurance can be customized to meet individual needs and budgets. Additionally, many policies offer a variety of options, or add-ons, such as riders, that can allow you to ‘bundle’ your coverage, for example -spouse and dependent riders.
- It’s only for elderly people. Some people believe that life insurance is only necessary if you are approaching, or in retirement and want to cover final expenses, but that’s definitely not the case. It’s equally important for those who recently married, have families and their financial obligations are their highest,. It’s also important for dependents who need to get an early start on their retirement savings, or save for future life expenses.
- Has Life Insurance through work. If your employer offers life insurance, take it and get as much as you can because it will be the cheapest life insurance you’ll ever get! This is because you are part of a group plan and they spread the risk among all employees. So, it’s usually free, or available at a minimal cost. The problem with relying solely on employer offer life insurance is like a bottle of Ketchup at a restaurant… you get to use it while your there (employed), but you leave it behind when you leave (quit/get let go/retire). It’s always a good plan to have coverage that you own and control, no matter ‘where or if’ you are working.
- It’s not important to me right now. Life is unpredictable, so be prepared. The younger the better. Especially if you’re talking whole/permanent life coverage, which generally has a higher cost due to cash value accumulation. Life insurance may not only cover your final expenses, but any debt you leave behind, as well as income replacement for a spouse or loved one. This is especially true if you are the sole-breadwinner of the family.
- It’s only necessary for people who have dependents. Although the cost of life insurance is cheapest when you are young, many people believe that life insurance is only necessary when you have kids. It can also be beneficial for those who want to ensure their final expenses are covered and debts are paid off after death. The truth is, anyone can benefit from life insurance, regardless of age. As you get older, the cost of life insurance is more costly, so it’s a good idea to start thinking about life insurance sooner rather than later.
- Once you have life insurance, you don’t need to worry about it. Life insurance is a long-term financial commitment, and it’s important to review your policy regularly to make sure it still meets your needs. You may also need to adjust your coverage as your life changes, such as if you have a child or get married.
In conclusion, it’s important to understand the facts about life insurance to make an informed decision about your coverage. It is a financial tool that provides peace of mind and financial security for you and your loved ones. Don’t let misconceptions prevent you from protecting those you care about most and your financial future. Take the time to learn about your options and chose a policy that best fits your needs and budget.
