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 difficult. In fact, a lot of consumers are likely to 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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Myth No. 1: 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.
Myth No. 2: 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.
Myth No. 3: Your rates are going to increase over time.
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. Younger policyholders have access to the lowest rates, which is why it’s smart to get into a policy as young as possible.
Myth No. 4: Life insurance is too expensive.
With so many options available to choose from, there’s likely a policy that fits your budget. If you need help finding what will work best for you, an insurance agent can guide you.
Myth No. 5: 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 some 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.
Myth No. 6: An employer-based policy is all you need.
Just because your employer provides a life insurance policy doesn’t mean that 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.
Did we just debunk any of the life insurance myths you believed? Sound off in the comments section and let us know.
Learn about your life insurance options. Schedule an appointment with a life insurance agent today.