If a loved one relies on you for financial support, life insurance is critical. Although no one likes to think about their own mortality, having coverage can be an invaluable safety net. Despite this, many people lack the coverage they need — and it’s mainly due to seven big misconceptions outlined below.
1. I only need life insurance when I’m older
Life insurance isn’t just for older adults. It can be beneficial to have coverage in your 20s and 30s. These years are often full of change. You might be finishing school, beginning your career, buying your first home or starting a family. With coverage, you can have a foundation of financial security for the life you’re creating. Getting coverage early also allows you to renew or convert your coverage at lower prices in the future.2
2. It’s expensive
People often overestimate how much life insurance will cost. They think it will cost them thousands of dollars. In fact, at a younger age, your coverage is at its lowest and can start well below $1/day.3 It’s also important to consider the cost of not having coverage for your loved ones. Spending a couple of hundred dollars a year can provide you with hundreds of thousands in protection.
3. I already have coverage through work
It’s great if your employer provides you with some life insurance coverage. The keyword in that last sentence is ‘some.’ Often, employers only provide the bare minimum when it comes to coverage. This just isn’t enough, and you will quickly outpace this coverage amount as your life progresses. Therefore, it’s a good idea to top up your work plan with some additional coverage to ensure your loved ones are sufficiently protected.
4. All coverage is essentially the same
There are some significant differences when it comes to coverage, like different products, terms and features. For example, you can get whole life insurance (permanent) or term life insurance. People often think that whole life is the way to go, but it can be more expensive. With term life insurance, you can be covered for a set period when it’s most important to have in place.4 So, be sure to do your research.
5. I bet my premiums will go up5
Unlike other types of insurance, your life insurance premiums won’t increase year over year. Your premiums will stay the same for the length of your term—another reason why it’s a good idea to get coverage when you’re younger and your rates are lower.
6. I’m single; I don’t need it
Many people believe that the purpose of life insurance is to provide financial protection for people with families. Yes, this is one of the primary purposes of coverage, but it’s not the only important one. If you have any student loans or business debt, you’re going to want to have coverage for that. And, if you care for your aging parents or a relative, having life insurance can also help financially protect them.
7. Getting coverage seems difficult
It doesn’t have to be. People think that there are many hoops they have to jump through to get coverage. Believing they have to complete medical questionnaires and medical exams, and that there’s a lengthy approval period. However, depending on your health and age, getting life insurance coverage can be a very simple and straightforward process. You can apply and get coverage online or over the phone with a Licensed Insurance Advisor. They’ll answer any questions you have and discuss different plan options that fit your budget with you.