Our ultimate mortality is an issue that many of us don’t care to face up to, and any discussion about life insurance forces us to have to. Insurance is an unselfish gift that one leaves behind for your family and dependents, eases the hardship for loved ones as not burdened with debt at their time of grieving. Families can be left in financial ruin after an unexpected death if there was wither insufficient or no life insurance in place at the time.
Our of reluctance to face up to our own mortality, several myths have come to be:
I’m young with no dependents, so I don’t need it. Most single people still have debts such as a car loan or credit card balance, plus final costs and taxes that would need to be covered. There are several benefits to buying life insurance when you are young, it’s cheaper so you can lock in more coverage, plus when you move on to owning a home and having a family, it’s already in place at this cheaper rate.
It’s too expensive. Term coverage is actually quite cheap. $36 a month can provide $500,000 of coverage for a 30-year-old non smoker.
Only the major breadwinner needs insurance. People tend to underestimate the financial contribution of the stay-at-home parent. Covering costs such as a housekeeper, childcare provider, driver, or yard worker add up fast, plus provides the surviving parent time at home with the children to help them through grieving.
I have insurance through group coverage at work. This is a great benefit, but is often insufficient to protect your family. Also, group insurance is temporary, so if you change jobs or you get laid off, the insurance doesn’t follow you. Your group coverage may be convertible to an individual plan, but options and coverage are often limited. If you need more coverage you must qualify for it later in life.
I’m better off investing my money. I would love to find an investment that would be worth $500,000 in 20 years contributing only $36 a month. Families without life insurance often need to cash in investments to cover expenses, and still don’t have enough to cover all of their debts and maintain their lifestyle.
I’m not going to die soon, so I will get it later. Unfortunately we all have a 100% chance of dying, we just don’t know when. The time to purchase life insurance is when you are young and healthy. The longer you wait the higher the cost, plus increases the risk of some medical condition leaving you uninsurable.
I only have to answer a couple of questions and sign and I have insurance. Lenders would like you to believe this, but it’s not quite the case. Life insurance companies perform what is called underwriting to determine your eligibility. This may involve a medical examination, a lengthy questionnaire and in some cases a report from your doctor. This is necessary, as they are guaranteeing a large payout based on your health and lifestyle, usually for many years into the future.
I have life insurance, now I don’t need to worry. Your financial needs and family dynamics continually change, so it’s a good practice to review your life insurance needs periodically.
Living for the moment is a wonderful way of looking at life, but reality does need to creep in now and then. Speak to a life insurance professional about the many options available, to get the right protection for your needs and do it sooner rather than later!
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