5 Common Life Insurance Myths Busted

shutterstock_153960929Life insurance offers an invaluable function to millions of people. It allows them to protect their families and loved ones from financial burden in the event of their death.

Whether you’re a current policyholder, or just beginning your search for coverage, you understand how important it is to make sure you have the right policy to protect your family.

However, there are many common misconceptions about life insurance that seem to be prevalent even among those who are relatively well informed about their life insurance options, and today we’re going to offer you some truthful insights.

Here’s a list of 5 common life insurance myths that we’ve busted:

Myth 1: I’m not married and I don’t have kids so I don’t need life insurance.

While you may not have a family to provide for, life insurance can still help cover funeral costs and unpaid debts, such as college or house loans. It would be nice to leave some money behind for your parents so they aren’t left with any unexpected financial burden. You can also use your life insurance policy for social good by using it to fund a gift to a charitable organization of your choice.

Myth 2: Life Insurance isn’t affordable.

The cost of life insurance can vary significantly and depends on a lot of factors, including the type of coverage as well as an individual’s age and medical history. Generally it is possible for an individual to find an affordable policy if they shop around to find one that works best for them.

Myth 3: You need X amount times your salary.

Many people try to stick to a general estimation to determine the amount of coverage they need. This often leads to people thinking they need 2X, 3X or 5X times their annual salary to be covered. However, there is not a one-size-fits-all model for purchasing life insurance because needs vary from person to person. It’s best to take the time to really think about your situation and calculate what you need more exactly.

Myth 4: Only a working spouse needs coverage.

Life insurance on the working spouse is meant to cover any gaps that occur due to the loss of income, but that excludes all of the valuable work that a stay-at-home partner contributes, especially in the case of childcare. If you’re used to an arrangement where they clean the house and look after the kids, are those amenities you’ll be able to afford if something happens to them? Don’t make the mistake of overlooking their contributions.

Myth 5: My term life insurance coverage at work is enough.

While this may sometimes be the case for single individuals with good financial standing, in most cases the policy offered through an employer is simply not enough coverage to sustain a family’s needs. Your insurance payout not only provides for your family financially, but it also pays off debts, mortgages, and taxes, and covers funeral costs. In addition, policies can vary widely and your company coverage may have limitations, like only covering accidental death and not death through sickness as well. Be sure to review your policy carefully and consider all your options with the bigger picture in mind.

Now that we’ve dispelled the myths about life insurance we hope you feel more informed.

Our SelectQuote agents are available to help answer any questions you may have regarding the subtleties of life insurance, so that you can choose the right policy for you and your family with confidence.

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