It is one of my biggest pet peeves that no one gets taught about the importance of life insurance often until they are much older, when it is always more expensive to insure or now they can't get life insurance.
I want to cover some of the common misconceptions about life insurance...
I have said this time and time again folks, no one puts accidents, injuries, illness or dying on their calendar. It's not a matter if, it is a matter of when. There needs to be better education on getting life insurance early on and re-evaluating your needs throughout your lifetime with your agent because needs will typically change. This should not be set it and forget it coverage. Hang in with me here, this post is gonna be a long but important one!
Myth 1 - No life insurance policy will pay a death claim if you die from Covid 19.
This was a scary question for many people over the last year or so. We saw a record number of life insurance applications last year because people were terrified of not having life insurance in place with the all of unknowns of Covid. Sadly there were individuals that could not get coverage because of underlying health conditions that made them either ineligible or it was too costly. Life insurance policies cover deaths caused by infectious disease, so your carrier will pay out if you pass away from COVID-19. Additionally, your claim won't be denied because of your vaccination status. If you have COVID-19 when you begin your life insurance application, your insurer may make you wait a set period of days until you become eligible for coverage and they can get the most accurate medical data when considering your application.
No one know just yet how this virus will play a role in eligibility or rates, again why getting coverage sooner rather than later is always better. Life insurance companies cannot change the terms of coverage for active policies, so anyone who was covered remains covered as long as the premiums are paid accordingly.
Myth 2 - As an adult, you don't need life insurance if you are not married or do not have kids.
Wrong...too many times I have witnessed a young adult pass without life insurance in place. Just because the young adult does not have a spouse or children they are leaving behind does not mean there will not be costs associated with their death.
Who pays for that person's burial costs? Often family members are left scrambling to find a way or a Go Fund Me Page is set up to try and cover those costs. That is an aweful way to have to make arrangements for someone who has died.
Purchasing life insurance when you are young and healthy (or having someone do that for you) can be one of the best decisions you will ever make in life.
Myth 3 - Life Insurance is not affordable.
Ok, hard stop here. Compared to what? The 3 cups of Starbucks you get a day? The 2 fast food meals you eat out? Burying someone? Having to pay a mortgage on one income now or for college for the kids? Phew...sorry, I get a little twitchy when I hear that one. I would rather call someone out on their unwillingness to do some re-directional spending than have to explain to a loved one that there is no money there bury their spouse, to keep a spouse in their family home with the kids, keep the light on or put food on the table.
A 2021 LIMRA and Life Happens study found that the majority of people overestimated the cost of life insurance by up to three times the actual cost. There are many options when it comes to life insurance, which I know makes it even more confusing but having some life insurance is better than having none. The cost does not typically go down on this type of insurance. Much like the cost of purchasing a home these days, to wait means paying more, getting less coverage or not being able to purchase at all. Working with an independent agent who knows how to evaluate your needs, understands your goals and can shop around will get you the best rates. You can sample rates here if you are curious and want to just see various types of plans and premiums.
Myth 4 - Life Insurance From My Job Is All I Need.
If you have group benefits (which often are at little or no cost to you) at your work, you may feel like you don't need any additional life insurance. Sounds great right? Well, yes except that group insurance doesn't typically offer all of the coverage you need, and you can lose it when you leave your job.
The U.S. Bureau of Labor Statistics data as of February of 2022 shows that the median coverage amount offered by employers in the U.S. is $250,000 at most. The reality is that most people need 10 to 30 times their annual salary to insure their wants/needs after their passing. So...if you make $50,000 a year you may need $500,000 or more and would leave you underinsured by half of your actual need.
Myth 5 -
My spouse/partner doesn't work outside the home, they don't need life insurance.
They may not collect a actual paycheck. There is no doubt, hey do have value! The cost to run a household can be over $100,000 a year when you breakdown the cost of childcare, household maintenance and other factors that would now be the responsibility of the spouse or partner left behind.
Who is going to take on those responsibilities if you still have to focus on all of the other things you already do to generate income.
Their final expenses will have costs.
They may get sick and have unpaid medical bills.
These are just some of the common misconceptions or mindsets when it comes to life insurance. Hopefully, you have a little more of an understanding of the power that having some life insurance can have for you and for your loved ones. There are many other benefits to life insurance that I would love to share with you. It all starts with a conversation...let's talk!
All the best,
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