Life Insurance: 7 Myths About Life Insurance
Unfortunately, life can be devastatingly unpredictable. Death is a natural part of life, but the idea that we are immortal is a myth. But there's an easy way to avoid being a financial disaster after your death: life insurance. This article busts seven common myths and debunks truths about this complicated topic.
Myth: Life insurance only covers those who die young.
Truth: With life insurance, you can protect your estate from the possibility of outliving your savings or inheriting the debt left behind by someone else's passing. You'll also have peace of mind knowing that no matter what happens to you, your loved ones will still be taken care of financially if something should happen to you unexpectedly (euthanasia).
Myth: There's only one life insurance company.
Truth: Life insurance is available from many insurance companies all over the world. The most important factor in selecting a life insurance policy is your overall financial goals, and then looking at which of these companies offers you the best coverage at the lowest cost.
Myth: Life insurance only protects a person's living expenses.
Truth: The majority of life insurance policies are designed to save for retirement, cover medical expenses, or both. You can also purchase life insurance to protect those who would be financially devastated if they were suddenly incapacitated after injuries or illness (e.g., upper-extremity amputation) or if they were diagnosed with a terminal disease (e.g. leukemia). In fact, life insurance can even be purchased to pay estate taxes.
Myth: The only way someone can get life insurance is to wait until they're 60 years old.
Truth: There are several different types of life insurance available to younger people, such as seniors, students, and even young adults. These policies provide cash value that allows you to use your policy as a savings vehicle after you've taken out coverage.
Myth: Life insurance costs a lot of money.
Truth: This myth is largely unfounded these days thanks to online providers like the one behind this article (see below), which offer affordable rates for comprehensive coverage. In fact, rates have fallen over the last decade. This is partially because policies are now designed to be more flexible (e.g., they can be either term or permanent, as well as with several different forms of coverage) and also to help counter the impact of inflation.
Myth: You need a life insurance policy to get financial security at death.
Truth: Life insurance provides you with peace of mind in the event that something unforeseen happens and you are now financially unable to meet your obligations as a result. And if you do become financially incapable, you'll have someone depend on your savings for many years after your passing--perhaps even for the rest of their life (see all available forms here).
Myth: Only rich people use life insurance.
Truth: Those who believe that life insurance is only for the rich (and that those who use life insurance must be very wealthy) may have never used reasonable forms of life insurance or are simply not aware of the many different ways to purchase coverage.
Myth: You have to use your whole paycheck each month in order to get good basic coverage from a life insurance company.
Truth: Life insurance policies can be purchased with either a single premium or group policy, and some providers will allow you to skip a payment here and there if necessary. But it's important to know that when you do pay for a life insurance policy, you'll be reimbursed the money once a certain amount of time has passed (i.e., once your insurance policy has paid off). Life insurance companies also provide flexible payment plans, such as monthly or quarterly installments.
Myth: Life insurance is only about death and its aftermath.
Truth: Actually, life insurance is about more than just death--it's about living and ensuring that your loved ones will be able to live in peace and comfort regardless of what happens to you.
With so many myths surrounding this subject matter, it can be difficult to discern fact from fiction (even for the most intelligent and well-educated people among us). But with the help of this article, you're now armed with all the information you need to know about life insurance in order to get a clearer picture of this often misunderstood financial tool. So don't waste another minute and see what's on offer by clicking on any of these links:
~ National Association of Insurance Commissioners (NAIC)
~ Life Insurance Fact Book 2016 (Block & Company)
~ How To Buy Life Insurance Online (eLifeInsuranceReview.com)
~ Life Insurance Basics (Will My Insurance Work For Me?)
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Above was taken from a very expensive "real time" shot from that resource I referred to earlier. This was taken from one of their many websites.
The Truth Is Out There
And I'll tell you what I think it is, on a scale of one to ten, they're all probably looking for insurance that is not only "cheap" but most important "quality."
My Own Personal Thoughts?
I wouldn't even give serious consideration to any of them. Why? Well, they're all dead ends. They're all destined to fail, and here's why...
These are the people that are using the most basic "information" they can find and then acting on it. They're like a guy hanging off the side of an oil rig. He has to just blindly trust (and hope) that there's a support platform down there and he won't fall into the deep water where he can't swim.
Most of these people act on this "information" because they are desperate for answers, and that's what makes them vulnerable to con-men.
I'm sure many of these people believe they have "life insurance," but I'll tell you exactly what it is: It's "Death Insurance." They'll have health insurance, auto insurance, disability, and probably even home owner's insurance before they get life insurance.
I'm telling you this because I know a lot of people who are looking for insurance. I know many of them, and they're not lazy. They're not stupid. They work their butts off. To me, that's a very good thing, and it proves that they're mature enough to operate in the real world...where we are responsible for our own actions...which is very important to consider when you're talking about life insurance.
When you do something and get it wrong, it will probably bite you in the ass very hard, so please do some self-assessment with me here:
You bought a short term health insurance policy because it was slightly less expensive then your full coverage policy.
You bought a short term disability policy because you needed that extra coverage.
You bought an auto-insurance policy because you wanted to pay off some of your credit card debt.
You bought a home owner's insurance policy because you couldn't handle the financial responsibility of someone else living in your house.
Do any of those things sound familiar at all? If so, congrats! You are a responsible adult and now have a full understanding of how life insurance works. I assure you it is not as "glamorous" as many people would like to make it out to be, but it is important, and kind of boring really...but also very real...
Conclusion:
Life insurance is meant to be an important addition to your overall financial security, and if you managed to read through all of this, you are in excellent shape, my friend. Just remember...
"Remember when the devil smiled at you because he thought it was a good idea?" - Dirty Harry
Never buy into what the con-men tell you.
They are out there (they're everywhere) trying to convince you that their "insurance" is the best deal around, or it's significantly cheaper...or they can "beat the system" and provide you with some type of "insurance that no one else can.