It doesn’t matter where you turn, when you start wondering why more people (especially senior citizens and our elders) do not have life insurance, you start to see a common set of myths that too many people adhere to.
It doesn’t matter what your needs are. Understanding these myths (and why they’re false) can help you make better decisions and protect yourself as time goes on. This article is going to help dispel some of the most common myths that hold people’s decision back.
Myth #1 – I Have No Dependents So I Don’t Need Insurance
Even if you do not have dependents and you’re single, you can still benefit from having a quality life insurance policy. For instance, your end-of-life celebration and medical expenses are going to need to be paid.
If you do not have a life insurance policy, these bills and taxes are going to be left to your family and friends. Whether, or not, you have dependents and the lifestyle you live does not change the fact that you should (at least) have enough insurance to cover your funeral expenses.
Myth #2 – I Have No Income So I Don’t Need Insurance
If you’re a stay-at-home parent or have a spouse that covers your monthly expenses, you may believe that you do not need an insurance policy. However, if something were to happen to you, your spouse may be required to spend money to take care of things you once took care of.
Childcare, as an example, will become an expense that your spouse has to take care of after you pass away. Having a life insurance policy will help cover those expenses and avoid having the burden put onto your spouse at a rough time in their life.
Myth #3 – My Investments Provide A Higher Return
Your investments may give you a higher return on the money you put into them but that return is never guaranteed. A life insurance policy gives you a guaranteed return in the form of a payout should something happen to you.
Investments fluctuate as the market moves up and down which creates risky situations that your dependents may not be able to cope with. This creates volatility.
Unless you have ammassed true wealth (more than $1 million in assets) and have already covered your funeral and burial expenses, having a life insurance policy is still a good idea.
Myth #4 – I Can’t Afford Good Life Insurance
In a recent study by Life Happens, more than 80% of people who were uninsured had dramatically overestimated the cost of a quality life insurance policy. Some did not even know the difference between the various types of life insurance, like a limited payment whole life policy and a term life insurance, because of rampant ignorance.
To give you an example, a 20-year term life insurance policy for $250,000 in coverage costs around $150 per year for a healthy 30-year-old person. This is a great tradeoff when you realize that your family members and loved ones will be taken care of after you pass away.
Myth #5 – I’m Not Old Enough To Need Life Insurance
The fact that you are “too young” to have a life insurance policy is a myth. Obtaining a life insurance policy while you are younger is actually cheaper than it is when you get older. If you are under 35 years old, the life insurance you obtain can be used to cover basic expenses.
However, as you get older, the life insurance policy that you took out while you were younger becomes more and more attractive. It’s also when the premiums on a new policy begin to grow larger and larger. This is something to think about while you are young because it is cheaper to obtain.
Myth #6 – My Children Take Care Of Themselves
Even if you are no longer providing primary care for your children, you could still help them cover other life expenses with an insurance policy. To give you another example, a life insurance policy could help your children purchase a home after your passing.
A quality insurance policy could also help them start a business or create an emergency fund. This is on top of being able to cover your funeral and burial expenses. Having a policy that takes care of them will be a huge weight lifted off their shoulders in their time of need.
Myth #7 – My Job Provides Me With Life Insurance
My companies provide life insurance policies that will not carry with you after you leave. Whether you change jobs or retire, the insurance policy will typically end once your employment ends.
It’s always easier to obtain a quality policy while you are still working and can manage the monthly premiums, rather than trying to find a policy as you grow older and your employer’s policy lapses.
The myths behind having a life insurance policy are just that, myths. With affordable premiums and nearly guaranteed payouts, there are not many good reasons for not carrying life insurance.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.