Life insurance can be an important part of a comprehensive financial plan, and if you don’t have any in place, it’s time to consider it seriously. Still, there are many myths out there about what life insurance covers, how much you need and why, who should buy it and so on. While these myths may have been true at one point or another, today the situation has changed dramatically. Here are 10 myths about life insurance that you should stop believing, along with some truths to help you get started with your own life insurance coverage plan today.
1: Life insurance isn’t necessary
If you have people in your life who rely on you financially, then you need life insurance. It’s as simple as that. Without life insurance, your loved ones could be left with a significant financial burden in the event of your death.
2: I am young and don’t need life insurance
If you’re young and in good health, you may think you don’t need life insurance. But the truth is, life insurance is not just for old people or people with health problems. Everyone can benefit from having life insurance, no matter how old or healthy you are.
3: There are better ways to save money
One of the biggest myths about life insurance is that it’s a waste of money. But the truth is, life insurance can be one of the smartest ways to save. It may seem expensive at first glance, but what would happen if you got hit by a bus tomorrow? How would your loved ones survive without your income? And how much would you have left behind for them if you were only saving for retirement?
4: A younger person will benefit from my death
One of the biggest myths about life insurance is that it’s only for older people. This couldn’t be further from the truth! If you’re young and healthy, you can get coverage for a very affordable price. And if something happens to you, your loved ones will be taken care of financially.
5: I should leave my assets for my family when I die
One of the biggest myths about life insurance is that it’s only for people with families. While it’s true that life insurance can be used to help support your loved ones financially in the event of your death, it can also be used for other purposes. If you have a small business or plan on starting one, this may be a way to ensure it stays afloat after you’re gone. It’s possible to name anyone as a beneficiary, so if you’ve got an elderly parent who could use some financial help from time-to-time and doesn’t have many resources or family nearby, they might appreciate this type of assistance when they need it most.
6: Premiums will cost too much
Many people think that life insurance is too expensive, but the truth is that premiums can be very affordable. In fact, the cost of life insurance has decreased significantly over the past few years. What’s more, you may not have to pay your entire premium up front. Instead, many companies allow you to spread out your payments across a year or two and pay in installments.
7: The premiums will go up every year so I won’t bother paying them
One of the most common myths about life insurance is that the premiums will go up every year. This simply isn’t true. Your premium is based on your age, health, and coverage amount, and while these things may change over time, your premium will not necessarily go up every year. In fact, many life insurance policies have level premiums, which means your premium will stay the same for the duration of your policy.
8: There are no benefits beyond the death benefit
Most people think of life insurance as a way to provide for their loved ones in the event of their death. But did you know that life insurance can also be used as a financial tool while you’re still alive? For example, it’s often cheaper than borrowing money from a bank and there are no interest charges if you borrow from yourself. It can also be an effective estate planning tool because it provides your beneficiaries with income tax benefits, and finally, it’s often more affordable than people think!
9. Having a policy will create problems if I change jobs or companies in the future
One of the most common myths about life insurance is that it will create problems if you change jobs or companies in the future. The truth is, having a policy in place can actually provide you with peace of mind and financial security during times of transition.
10. It is not worth it because I don’t have dependents
One of the most common myths about life insurance is that it is not worth it if you don’t have any dependents. This couldn’t be further from the truth! Everyone, regardless of their relationship status or whether they have children, should have some form of life insurance.