Life insurance products provide an essential role in a comprehensive risk management plan: providing financial protection to those closest to you. Life insurance products are offered by nearly every insurance company and are widely varied in their structure, design, and purpose. We’ll dispel a variety of myths, misconceptions, and fallacies regarding life insurance in our first part of this installment series!
Myth 1: “I’m too old for life insurance.”
What about final expenses? According to aarp.org, the average cost of a funeral is $10,000. The American population’s life expectancy continues to rise – which means that their nest eggs are usually exhausted and may leave the deceased party’s family responsible for final expenses. Companies can write a policy with a death benefit as low as $10,000 (or lower).
Myth 2: “I’m a tobacco user; therefore, I am uninsurable”.
Insurance companies continue to offer competitive rates to tobacco users – contrary to what many of our prospects believe. Obviously, life insurance premiums are lower for non-tobacco users (another reason to quit!); but, tobacco users are able to find coverage at a reasonable rate.
Myth 3: “I have no need for life insurance – I have my own nest egg.”
If you are proactively saving for retirement – congratulations! It is a great first step to financial security during your golden years. However, many unexpected events can happen between now and your retirement years. Wouldn’t you prefer to have the peace of mind knowing that you and your family are protected?
Myth 4: “I have been told that I’m unable to obtain life insurance”.
Good news – many companies offer what they call a simplified issue policy! These policies are issued without any medical exams if you can answer ‘no’ to a few simple questions. Not everyone is insurable; however, these products fill a large need for many individuals.
Myth 5: “I am single and have no children.”
Yes, you have no direct dependents; however, that doesn’t mean life insurance would not benefit you. Do you have a mortgage or debt? Does anyone rely upon your income? How will you pay for your final expenses? Do you plan on setting aside any money for charity? If you can answer yes to any of these questions, life insurance is beneficial to an individual risk management program and will avoid burdening any of your family members with your financial obligations.
**Important Note: Most proceeds from a life insurance policy are not subject to probate or taxes.**
Life insurance can be utilized to serve various purposes and it’s important to determine what product fits your individual needs by discussing them with your insurance agent. We will post part two to this installment series shortly to dismiss other misconceptions! As always, please read policy forms for exact coverage.