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Life Insurance Myths You Need To Stop Believing

– Contributed content –

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(Helloquence, Unsplash)

30 Dec. 2019. Much like car insurance, there are a lot of myths and misinformation floating around about life insurance. Maybe avoid taking out life insurance as they assume it will be complicated to sort out or think it’s only useful for older people. In fact, anyone in a dangerous line of work or anyone with dependents should consider it. Here are some of the biggest myths about life insurance.

Myth: It’s expensive

The truth: One of the biggest misconceptions about life insurance is that it’s expensive. Most people severely overestimate the cost of the policy they would need. In fact, if you’re smart and shop around for a quote, you can find very affordable policies. Don’t just take the first policy you find and spend some time looking for the best price you can find.

Myth: There’s too much choice

The truth: There are a lot of different varieties of life insurance out there, but for most people the best choice is direct term life insurance, which is actually quite straightforward to organize. With this kind of insurance, you determine the amount of coverage and the timespan you’ll be protected for. As long as you pay your monthly premiums, if you die within the timespan, your chosen beneficiary will get the insurance payout. There are lots of tools online to help you research the best policy for you.

Myth: Young and healthy people don’t need it

The truth: If you can afford it, you’re better off buying a life insurance policy when you’re young and healthy, as a policy will cost less then. You’re more likely to develop health problems as you get older, so the price goes up the older you are. If you buy insurance when you don’t need it, you’ll get a better price than if you waited until you do need it.

Myth: You can’t get life insurance if you have health issues

The truth: Unless you have very severe health issues, you should be able to get term life insurance.

Some conditions, including arthritis, high cholesterol or diabetes, will mean that you will get a higher quote for your life insurance, but you will still be able to get a policy. Do some online research and shop around for the best price.

Myth: Single people don’t need it

The truth: There are lots of good reasons for those without a family to buy life insurance. If you have children in the future, hope to get married or having other relatives who rely on you for financial support, then a policy is a good idea. If nothing else, a life insurance payout can help to cover your funeral costs.

Life insurance could also be a help if you own a business or have co-signed debts. Life insurance could prevent your loved ones from becoming saddled with your debts if you die.

Myth: It’s better to set aside money in savings rather than buy life insurance

The truth: While it is of course financially savvy to save money for your retirement, a life insurance policy is an important part of any financial plan. If you can find an affordable life insurance policy, then you should be able to afford to pay for a life term policy and keep paying into your savings account at the same time.

You should prioritize life insurance and savings for later life over savings for things like vacations and shopping. Plan for your future.

Myth: Older people can’t get life insurance

The truth: In reality, even the over 60s can find term life insurance, unless you have a terminal illness. If you are older, it might be best to consider a shorter-term policy that will help your family with things like buying out a business partner or managing your estate after your death. While you should be able to find a policy that is suitable for you, do bear in mind that the cost of coverage will be higher if you are older than if you had taken out a policy when you were younger.

Older people looking for insurance could also consider final expense insurance, which offers a payout designed to help your family to pay off any final debts you leave behind and to cover the costs of burial expenses.

Myth: You don’t need life insurance if you’re a stay-at-home parent

The truth: Think about what would happen if you were to die. Who would take care of your children or your elderly parents? If you die leaving a spouse behind, they may need to hire help to care for the family. While they won’t be missing out on your salary, covering the costs of this care might be a struggle that life insurance would help to cover.

Myth: Just getting life insurance through your employer is enough

The truth: Getting some group life insurance through your work is definitely a worthwhile employer benefit. However, the payout from this type of insurance is usually quite low, often only twice your basic salary. This sounds alright, but is unlikely to be enough to properly provide for a young family.

You should also consider what would happen if you lost or changed your job. A policy through your work won’t move with you to a new job. You’re much safer taking out a personal policy of your own. This ensures that your family will be properly cared for, regardless of what happens at your workplace.

Life insurance should be an essential part of anyone’s financial plan. Nobody likes to think about what will happen after they die, but a proper insurance policy can protect your loved ones from being hit by funeral expenses or your debts. Use life insurance to give you peace of mind in knowing that your family will be provided for after you’re gone. No matter what age you are, what health conditions you may have, whether you’re married, single or a parent, or what kind of career you have, then there will be a suitable policy for to help your loved ones.

Editor’s note: The opinions in this post are the contributor’s and not those of Science & Enterprise.

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