Five Top Myths About Life Insurance Debunked

Life insurance—is it an excellent way to prepare for the future and protect your family financially in the event of your death? Or, is it just a waste of time and money? If you still don’t know the answer, then odds are you’re confused by all the myths running lose out there about what life insurance is and how it works. Take a look at these top ten myths about life insurance and learn to tell the difference between misconceptions and reality.

Five Top Myths About Life Insurance DebunkedMyth #1—I’m too young and healthy for life insurance

This is one of the most common myths about life insurance. And it’s a hard one for many people to accept as myth. No one wants to dwell on the thought of their own death. And yet no one knows exactly when they’re going to go either. Besides the fickle nature of fate, there are other factors to contend with here.

For instance, did you know what it’s much easier and cheaper to get life insurance when you’re still young and healthy? And that if you purchase now, you are more likely going to be able to find an affordable premium as you age? So being young and healthy doesn’t mean you don’t need life insurance. In fact, it’s a good time to get started with a policy.

Myth #2—I’m single with no dependents, so I don’t need it

Yes, that could be true IF you have zero debt, no medical bills, and enough money saved to cover your funeral and burial costs, or alternative plans for these costs to be paid upon the time of your death. But if not, you could end up leaving your loved ones with a serious financial burden.

Life insurance can help you pay for your burial and funeral costs and other financial loose-ends so that your relatives won’t be burdened with unexpected costs. Not only that, but what about the future? If you’re in good health now, it’s better to lock in your rate while you can. This could keep your premium rates lower for years to come.

Myth #3—The insurance I have through my job is enough

Are you fortunate enough to have a job that offers some insurance coverage? If so, then you might think you don’t need additional coverage. Most likely, you’d be wrong. Most workplace, or "group", life insurance policies provide a relatively small death benefit. $50,000 would be the top limit allowed by the law.

For the majority of families, $50,000 just isn’t enough coverage. It may help pay for your final expenses, but wouldn’t leave much left over for dependent care, living costs for the surviving family members, or education expenses for any surviving children. Most likely you will need additional coverage to provide for your family’s needs in the event of your death.

Myth #4—I don’t work, my spouse does. So I don’t need life insurance

Just because you aren’t the breadwinner in your household, that doesn’t mean that your death wouldn’t leave your family with financial and emotional issues to sort out! Burial and funeral expenses, unpaid medical bills, and more will still need to be paid. Not only that, but your spouse might need to change jobs, move, hire child care, or take an extended period of time off of work to sort things out. A small life insurance policy for a non-working spouse could make a big difference for the surviving spouse in terms of securing future financial stability for the family.

Myth #5—Children never need life insurance

No parent looks forward to planning for the possible death of a child. But the fact is that child life insurance isn’t all about preparing for the untimely demise of a child. It can aid grieving parents by paying for unexpected funeral and burial expenses. It may also allow a parent to take much needed time off of work to mourn.

In addition, child life insurance can guarantee your child’s insurability into the future. Buying a life insurance policy for your child now means your child won’t have the same difficulties getting insured should she or he develop health issues later on in life. You can lock in a policy and rate now so that your child won’t be denied later.