Life insurance can be a complicated product without proper planning. With so many different types of life insurance available coupled with the unique needs and goals each consumer has, people should consider carefully the type and amount of coverage for their inimitable situation.
Fortunately, the characteristics of life insurance for most people are easier to deal with than trying to figure out what they need and why. Here are 10 ???mythconceptions??? encircling life insurance???and the clarification:
1. I???m Single with no dependents, I shouldn???t need any coverage.
Even single people need at least a basic policy to cover final expenses. As the old adage goes??????we know we???re going to pass way; we just don???t know when.??? The last thing we want to do is leave a legacy behind of unpaid medical bills, funeral cost, and personal debits. Some life insurance policies have a cash accumulation component that people can use tax-free in the future for personal needs. Single with no surviving family can provide an endowment to a charity, alma mater, or their church.
2.???????????? I have coverage at work, why would I need to have any more.
You might not, at least not today. While most employer policies can be adequate for single people with no dependents, the same may not be true for couples or people with dependents. In all most every case when you leave your place of employment you cannot take your life insurance with you. Leaving your family exposed and burdened with final expense costs. For those few exceptions whereas part of a retirement package, the coverage you do receive is generally reduced to a basic amount to cover funeral costs and nothing more.
3.???????????? I???ve always been told that buying term insurance and investing the difference is smarter.
Not necessarily. Term Life Insurance is like leasing a car; you get to have for a while, but then the term ends. The two factors that affect the cost of life insurance is age and health. As we get older if it???s one thing we can count on is that our health will change and not usually for the better. The cost of term insurance can be exceptionally high as we get older and your health may disqualify you from getting life insurance once your term expires. Most people lack the investment discipline to truly invest the difference saved by buying term insurance (just being honest). Life gets in the way; we need a new car, pay for a wedding, help out our children, or take care of an ailing parent. Any of these plus several other reasons could prevent adequate money set aside to cover final expenses.
4.???????????? Only the income provider should have life insurance
Not True. A stay-at-home parent raising a family is one the most costly services one provides. The cost of day care, cleaning, and attending necessary activities to name just a few, will either take work time away from the breadwinner or need to be hired out; all of which far out way the cost of a policy premium. Not the mention the cost needed for final arrangements and expenses.
5.???????????? Premium costs out way the benefits. I can???t afford it.
For some a life insurance policy will need to be something we save for by trimming the budget. If the only reason for not purchasing a life insurance policy is because you think you cannot afford the premium, then we need to ask ourselves a few questions. What is cost of not having a life insurance policy? Does my family have enough money in the bank to cover my funeral costs? Will my family have to beg for money or barrow the money to cover my cost burden? With some many different insurance companies and the many different policy types and coverage???s available to consumers there is a policy out there that will fit into any budget.
6.???????????? I???m over 60 what???s the point of getting life insurance now.
This is a big mythconception. The purpose of having life insurance is to prevent passing along a legacy of debit and burdening our surviving family with the costs associated with final expenses. Over 60 life insurance makes sense if we???re going to leave behind any debits and with the different insurance companies and the different policies available the cost for new policy or adding to an existing policy will cost much less then you think.
7.???????????? I???m under 35 I don???t need life insurance.
Again, not true. Young people sometimes feel their invincible, they???re not sick and in perfect health so what???s the point??? ???I???ll get it later?????? Life Insurance is much cheaper when we???re younger and with the new products and their features currently available to consumers it can truly be the life line your family needs should you become disabled or prematurely pass away.
8.???????????? My Mortgage is covered; that???s all I need.
Not necessarily. Life insurance to cover a mortgage is designed to cover that debit only. While it might mean you family will not have to relocate it does not replace the lost income a breadwinner provides the household. Nor does it provide funds for funeral costs which could be as high $12,000 on average. Also, a lot of these types of policies only cover the mortgage if an accident occurs and not from health related conditions. Get with an insurance professional to help explain the type policy you have.
9.???????????? My health is so bad there???s no way I can get life insurance.
You???ll be surprised to know that far more is available then you see on mainstream media. While the cost for some of these types of coverage can be slightly higher there are companies available to consumers that can fit your goals and needs as well as your budget.
10.???? It???s better for me to invest the money then it is to buy life insurance
Codswallop. Until your investments or liquid assets exceed your current and future debits you need life insurance. You take an enormous risk in relying on investments in your working years, especially if you have dependents and family dependent on your income. If you pass way prematurely, there may not be enough income to your family once your investments are depleted. The risk of the Wall Street casino is just to great not to life insurance to off-set the risk.
At the End of the Day????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
These 10 misconceptions are just a few of the misunderstandings about life insurance. What you need to take away from this is that until your assets can cover all of your debits current and future you cannot afford to leave life insurance out of your budget. Seek a life insurance professional to help you plan a legacy for your family.
