When it comes to life insurance, you want to be sure that you have a complete understanding of the product you’ve entrusted to keep your family’s financial future secure. However, with all the various products, providers and information out there, separating truth from fiction can be far more difficult than it should be. In fact, a lot of consumers likely believe one or more myths about life insurance.
We take a look at some of the most common life insurance myths and reveal the truth behind the misconceptions.
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Life insurance is unnecessary.
Many consumers assume that life insurance is simply something that doesn’t apply to them. Perhaps they believe that only people who already have dependents should bother investing or that you need to reach a certain age for the investment to be worthwhile. In reality, the benefits of life insurance are universal. Without at least some protection, you’ll likely be leaving behind a mountain of debt for those you leave behind when you pass away. With a bit of research and honest financial reflection, you can decide how much coverage you need rather than write off life insurance entirely.
Once you start a policy, you’re locked in.
Although whole life insurance policies are indeed permanent, many insurance companies offer the ability to convert your term life insurance plans to a whole policy when the time is right. As the years roll by, you may find your coverage needs change with the different stages of your life; take this into account when designing your plan.
Learn the differences between term and whole or permanent life insurance.
Your rates are going to increase over time.
Younger policyholders certainly have access to the lowest rates but rates do not continue to increase as you hold a given policy. Once you get approved for a life insurance policy, the terms – including your premium rates – are locked in. However, if you’re in your 50s and looking to start a new plan, you will encounter higher rates than a 20-something because older customer are considered more of a financial risk. There’s your incentive to start a plan as soon as possible.
Life insurance is too expensive.
With so many different types of plans available, it’s unfair to label every policy as “too expensive.” A policy deemed too costly by one consumer based on their needs and budget may be a bargain for another person. If you have any interest in obtaining coverage, you need to do a bit more digging before you assume that there is no way for you to get the life insurance your family needs.
Your health is too poor to qualify.
Don’t speculate that a certain medical condition will prevent you from qualifying for a life insurance plan. Many providers are open to taking on a certain percentage of high-risk special cases, and others actually specialize in policyholders who are afflicted with serious medical ailments that might complicate their ability to secure coverage elsewhere. Some policies don’t even require a medical exam, though these are often more expensive than traditional plans.
An employer-based policy is all you need.
Just because your employer provides a life insurance policy doesn’t mean that said plan offers enough coverage to meet you and your family’s needs. In many cases, this contribution is minimal, serving only as a baseline on which the policyholder can build. Moreover, you might be at risk of losing this employer-based policy entirely if you were to leave the company for any reason. Despite the shakiness of this coverage, it is often enough to trigger a perfunctory response from the consumer that they already have life insurance and don’t need any more; this usually is not an accurate assessment of their coverage.
Did we just debunk any of the life insurance myths you believed? Sound off in the comments section and let us know.
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