Busting the Top 6 Life Insurance Myths
This blog is all about the myths and truths behind life insurance. From whether you actually need life insurance to the reasons why you might want to get it, we'll debunk these misconceptions and give you a better understanding of what to do when contemplating life insurance.
It's time to take a closer look at the facts of life insurance and uncover some misconceptions that may have been preventing you from securing your future with this type of protection. This post will equip you with everything you need for crafting an informed decision about how much coverage is appropriate for your needs, as well as explore common concerns like lost wages or low interest rates.
The reality of life insurance is that it's a necessary tool for any adult who is responsible for their own well-being; whether it's to bridge the financial gap that comes with an unexpected loss such as a death in the family or to secure the future financial security of your loved ones in case of your untimely passing.
Life insurance is also a great way to protect yourself from future medical expenses, as described by U.S. News & World Report: "Modern medicine has brought incredible advances in our ability to cure disease; but it has not yet achieved the holy grail of long-term survival. The chances are high that you will one day require long-term care. The average cost of a year in a nursing home is more than $80,000. Unless you have the means to pay for it yourself, your family will likely be stuck with this bill."
Have you already determined that life insurance is necessary in your situation and want to learn more about what questions to ask a life insurance agent? Then keep reading! If, on the other hand, you're still unsure about whether life insurance is something you should pursue or not, let's look at some common misconceptions surrounding this type of protection before moving on.
MYTH: I don't need life insurance because I'd rather not start taking out loans for a ballooning mortgage payment.
FACT: One of the first financial lessons that most people learn is that it's better to borrow more money than you need to pay back. Think about every time you've taken out a loan -- whether it was for an apartment, car or a grand vacation -- and what your strategy is now to make sure you can pay it back. It's the same financial principle that motivates most to get life insurance, which is the method of borrowing money to pay for your family's future. Life insurance protects you by enabling your family to continue paying off your debt without taking on the responsibility or interest-heavy payments. And, if you've paid for life insurance over time and never needed it, then you've successfully made a debt-free investment in your future.
MYTH: I'll buy life insurance when I'm older and more likely to die.
FACT: It makes financial and medical sense to get life insurance as soon as you can, no matter your age or health status. The longer you wait to get this type of protection, the more expensive it will be in the long run. And the younger you are when you get coverage, the lower your premiums are likely to be. The fact is that if you're healthy enough to work and earn a living, then it's important to have your life insurance in place so that if something happens that prevents you from working (think car accident or injury), your family will have adequate resources available to maintain their standard of living.
MYTH: Life insurance is a waste of money because I don't smoke and I've never been sick.
FACT: The aim of life insurance is to insure your life if something unforeseen happens, not to ensure that you live to the ripe old age of 100. There are several reasons why people get life insurance, such as a death in the family, to help pay for funeral costs or for medical bills. It's important to remember that this type of protection is both highly personal and flexible, which means that you can make it work any way that works best for your situation.
MYTH: Insurance agents are more interested in selling me more coverage than helping me figure out how much I need.
FACT: Life insurance agents and agents in other lines of business have a professional code of conduct that establishes how they are expected to interact with their clients. This code sets standards for how they should treat their customers and lays out rules for how, when and what they're allowed to say or not say. One of the most important things you can do when deciding whether life insurance is right for you is to find a trustworthy agent who will take the time to understand your individual needs and goals -- while working tirelessly to find the very best policy that fits your needs, at an affordable rate.
MYTH: My partner has life insurance so there's no reason for me to get coverage too.
FACT: There are many reasons why you might want to get life insurance, not all of which have to do with your significant other. If your partner has life insurance and you're concerned about the amount of coverage he or she has, then you can ask if the policy is available to cover more than one person. You can also consider getting a combined policy that covers both of you.
MYTH: Life insurance destroys my credit score because I'm paying a high monthly premium.
FACT: It's important to understand that life insurance is only as dangerous as its policyholder's behavior. If you're making monthly insurance payments in a timely manner and have a good credit score, then your life insurance shouldn't hurt you in the long run.
MYTH: My parents are paying for my tuition, so I don't need to get life insurance.
FACT: You might not think that you need life insurance while you're still paying for school if your family is helping to foot the bill. But remember that even though paying for college is an expensive and ongoing responsibility, it's something that can eventually be paid off and most likely will factor into your future income.
Conclusion: If there's one thing you take away from this, make it that you need to have a conversation with a life insurance agent or financial adviser who can help you understand whether this type of protection is right for your unique situation. Don't be afraid to ask questions and to shop around. Asking the right questions might be uncomfortable at first, but it will eventually lead to understanding and clarity about what kind of coverage is right for you.