By From overestimating cost to thinking it’s unnecessary, these myths persist about life insurance.
September is Life Insurance Awareness Month. Today I wanted to talk about the most common myths and misconceptions we hear about this important part of your comprehensive financial plan. I know it’s difficult to think about the unthinkable, but having the right coverage can keep a loss from becoming a financial burden as well.
Myth #1: Life insurance is too expensive.
This is probably the reason we hear most often from families who don’t have life insurance: they think they can’t afford it. And, according to LifeHappens.org, this is true everywhere: more than half of Americans believe that life insurance costs three times more than it actually does. Additionally, 42 percent of millennials overestimate the cost of life insurance by five times. Of course everyone’s situation is different, but our team can help you find a policy that fits your family’s needs and budget to make sure you and yours are protected.
Myth #2: I don’t need coverage beyond what I get from my employer.
While in certain circumstances the coverage offered by your employer could be enough, there are a few things to keep in mind. First, if you have dependents, it is likely that your work policy is not enough to take care of them in the face of tragedy. At the very least you should take a close look at the benefit and coverage amounts. Second, if you leave that job, that insurance will not go with you. So, if you develop a medical condition during that time or go through an illness, you may not qualify for the best rate on another policy. It’s generally preferable to lock in a better rate now than risk not being able to qualify for coverage later.
Myth #3: Only working spouses need life insurance.
This is one we hear a lot in our office. But think about this: if something happens to your non-working spouse who, say, provides full-time childcare, how will you pay for that childcare without that person? Daycare costs can be significant, and taking time off work is probably not an option. Life insurance can also help replace any future income your spouse would have earned after going back to work, if that was the plan.
These are just a few of the myths and misconceptions we hear from those who do not have life insurance or carry enough coverage. If you don’t have life insurance or you’re unsure of what your coverage levels are, please give us a call. We’ll be happy to review your policies and make any necessary adjustments.
Article by Alex Roig, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.