We are often told how important life insurance is, yet many still don’t have it. The number of people with life insurance is on a downward trend. In 2019 only 57% of Americans had life insurance, and in 2020, life insurance covered 54% of the U.S. population.
Sometimes it’s hard to figure out exactly what kind of policy to buy and how much coverage someone may need. In addition, there are a lot of life insurance myths floating around about coverage—myths that can lead people to make bad decisions about their options or to not get coverage at all. In this article, we will debunk five common life insurance myths and set you on a good path to finding the right option for your family.
Myth 1: Life Insurance Is too Expensive
Life insurance is one of the most important investments you can make, but it doesn’t have to be expensive. There are many life insurance policies available that are very affordable. In fact, the cost of life insurance depends on age. The earlier you get it, the cheaper it will be.
A survey by Life Happens and LIMRA found that Millennials overestimated the cost of life insurance by more than six times higher than it actually is. Exaggerating the price of coverage is a classic life insurance myth that turns people away from even considering investing in a worthwhile policy! It’s more affordable than you think and is a vital part of financial planning.
Myth 2: Why Do I Need Life Insurance if I’m Young, Single, and Healthy?
This question is one of the biggest life insurance myths. Everyone, regardless of age or health, needs life insurance. No one knows when their time will come, so it’s important to have a life insurance policy to be prepared.
Even if you don’t have any dependents, life insurance can be a wise investment. If you have debt, a life insurance policy can help your loved ones pay off your debts after you’re gone. And if you’re single with no debt, your life insurance policy can be used to cover funeral and burial expenses.
Myth 3: I Have Enough Money Saved Up, so I Don’t Need Life Insurance
While it’s important to have savings, life insurance can provide even more financial protection in the event of an unexpected death. Plus, life insurance can cover much more than your savings.
Some may even add, “I have enough money from investing.” Investments are important, but they come with limitations. What many people may not realize is that returns on investing are taxable, but most life insurance policies are non-taxable. This lightens the load your loved ones will have to carry.
Myth 4: Life Insurance Is for the Dead
This couldn’t be further from the truth! Life insurance is for the living. It’s there to provide financial protection for your loved ones in the event of your death.
Life insurance can be used for other things than just death benefits. Many policies have riders that allow you to access the cash value of your policy while you’re still alive. This money can be used for things like supplemental retirement income, college tuition, or a down payment on a house.
Also, when it comes to life security, it can alleviate stress. Two-thirds of people who have life insurance feel more secure than people who do not have life insurance. They know that their loved ones will be taken care of financially if something happens to them.
Myth 5: My Employer’s Life Insurance Policy Is Enough
While employer-provided life insurance is a great benefit, it’s not always enough. Most employer-provided life insurance policies only cover 1-2 times your salary, but most experts recommend having 10 times your salary. Plus, if you leave your job, you could lose your life insurance coverage.
If you have a family, you’ll need more than double your salary to ensure they’re taken care of financially if something happens to you.
Invest in a Life Insurance Policy with Bethany Insurance
Don’t let these life insurance myths keep you from getting the coverage you need. Talk to a representative at Bethany Insurance today about finding the right life insurance policy for you and your family.
