Life insurance is like death and taxes – nobody wants to talk about it. Unlike those other taboos, this one yields lots of benefits and it’s not as scary as you might think.
In recognition of Life Insurance Awareness Month, let’s tackle the 5 misconceptions about life insurance.
1. Life insurance is too expensive.
Many people, especially older people, don’t ask about life insurance because they assume it’s going to be cost prohibitive. Often they have a pre-existing condition, but the good news is that most people do, so you are not alone. Theaverage cost for a policy for a male in excellent health is as little as $20 for a payout of $100,000 to $112 for a payout of $1 million, which most people can afford. It’s also good to remember that as you get older, policies will become more expensive, so buying when you are young allows for good coverage at a low price.
The benefit can help your beneficiary pay off a mortgage, provide a college education or replace lost income that would have been generated from a job, pension, or Social Security.
To get an idea of what a policy may cost for you, take a life insurance needs analysis.
2. Workplace insurance is enough.
I want people to take advantage of their workplace benefits because it can be inexpensive, there is no underwriting, and it’s easy to get. Many employers usually offer two to three times your annual salary. Supplemental coverage can add an additional three times the typical salary, which provides added peace of mind to the individual and their family.
3. It’s too difficult to buy life insurance.
Depending on the amount and your health situation, it can be pretty fast and easy to get insurance. There may be a health exam, which means the provider would send a specialist or a paramedic to your place of work or your home. How much easier can it be? Some types of insurance policies don’t even require an exam. These are called guaranteed issue life insurance policies, which can address individuals who have been diagnosed with a terminal illness or another serious medical condition that could lead to death.
4. I don't need life insurance until I'm older.
Most young people feel like they are indestructible, but accidents are a leading cause of death in adults up into their early 40s. Life insurance is about planning for the future and providing for those that depend on you today and years down the road. Buying insurance at a young age is not only inexpensive, but it allows you to care for your loved ones today and tomorrow, to give them the kind of protection that will be life-changing if something happens to you.
Some wealthy people use it to help their family to pay off estate taxes after their death.
5. Insurance policies are too complicated to be useful.
For a lot of my clients who are older, getting life insurance is not a priority, unless they're trying to leave a legacy or we're reviewing a policy that they already have, which leads to one of my Golden Rules: Know What You Have.
A few months ago, somebody came to us with a policy that was like a life insurance policy. It had several features including critical illness, which is usually referring to cancer, heart attacks, strokes, or something like that. This person was diagnosed with something serious, we were able to file a claim and get that claim paid because we read the policy.
If you have any questions about how much coverage you should have or concerns about your current coverage, we are here to help. A complimentary consult is just a click away :)
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