Top Myths Keeping People from Buying Much-Needed Life Insurance
Life! It can be pretty great, wouldn’t you say? And for exactly that reason, many people don’t like talking about life insurance. For some, it can seem a little morbid to discuss what happens to you or your money after you die. And if you’ve seen Groundhog Day, your opinion of life insurance salespeople may be a little tainted.
However, life insurance brings assurance to you and your loved ones that finances won’t be a worry in a stressful and sad situation. Because people don’t like talking about life insurance, many don’t understand what they need to do to get the best coverage, and may end up in trouble when they need the most help.
As benefits consultants we hear the same reasons for people NOT to get life insurance over and over again. Only problem is, these “reasons” are mostly myths:
“My employer provides life insurance, so I don’t need to worry about it.”
By far, this is the most common thing people will say when asked about life insurance. Most employers who offer group benefits will provide a life insurance. The amounts can be as low as $10,000 or pay out of 1-2 your annual salary (maybe up to 4-6 if you’re lucky). While it seems like a lot, it’s usually not enough.
You should be looking to have anywhere between 8-12 times your annual salary in coverage if you have dependants. This is because insurance payments often don’t include bonuses or other salary perks.
In most cases, if you leave your employer you have the option to convert your group policy to an individual policy. However, there is a timeline to do so and if you’re not aware of your options you may miss the window to apply. There may even be a better deal for you specifically outside what your employer offers. So it’s worth exploring.
This life insurance calculator will show you what kind of coverage you need based on your current income.
“I am too single/young/healthy to worry about life insurance.”
Ah yes, why worry about death when you’re so far from it? Must be great to be invincible and have no chance of dying whatsoever.
Of course, this isn’t the case. No one expects unexpected things. But unexpected things happen all the time, even to young people. And right now, young single you is at the best point in their life to invest in insurance. Your vibrant and healthy self is likely to get some of the lowest premiums which will end up costing you less over time, especially if you end up developing a health condition down the line.
If something suddenly happened, do you have the means to cover your debts or funeral and medical costs? Life insurance will ensure parents or loved ones don’t need to cover them.
“I already have mortgage life insurance through the bank and that’s all I need.”
Often times it’s a prerequisite to have a life insurance policy which would cover the cost of your mortgage. These policies are easily available to be included with your mortgage at the bank. However, did you know that it’s not mandatory for you to keep it at the bank and often times there are much less expensive plans available through other avenues?
Want to compare the differences between mortgage insurance offered through the bank and a term policy? Have a read at our past blog
“I don’t earn income, so it doesn’t make sense to get life insurance.”
Maybe only one member of your family is earning income. While it definitely makes sense to get them life insurance, what about a stay-at-home or another non-earning parent?
Well consider the cost of not having a stay at home parent. If, heaven forbid, something happens to the person taking care of the kids, homeschooling or doing the housework, who takes on their responsibilities? It’s likely you’ll incur additional expenses to take care of kids and cleaning, and if there’s no additional income to cover them, you’ll want life insurance.
“I am too old/unhealthy to get a good life insurance plan.”
Some insurance companies cover or specialize in all kinds of conditions and there are policies which offer guaranteed acceptance plans. These premiums are generally more expensive and have more limitations, but it’s certainly better I’m the long run than not having any type of coverage.
“Life Insurance is too expensive.”
Again, it’s all relative. The premiums you pay are going to be way less than what it would cost your loved ones in the case of untimely death. And the earlier you start, the less it will be. 80% of people will overestimate what life insurance costs. Get a quote and surprise yourself with how affordable it actually is.
The best place to find a good life insurance deal is online.
There’s a lot to consider when looking for a plan, and you could spend days reading articles like this to make an informed decision. However, we’re very capable of breaking things down for you and finding a plan that’s going to be most suitable. Asking Google is great, but asking Jackie or Michele is much more personal and you’ll be sure to get the answers you’re looking for.
Hey, that wasn’t so bad! Hopefully we’ve taught you a thing or two about life insurance. And at least now you can make an informed decision about whether or not you are truly going to need it. And if you still have questions, please reach out, and we’ll be happy to set up a consultation with you to talk more.
Have a great life!