Shockingly, only about half of all Americans carry life insurance, a decrease of 13% over the past ten years. And worse yet, lower-income households are more likely to forego life insurance as compared to their higher-income counterparts. Sometimes, the mechanism keeping people from purchasing life insurance is a series of life insurance myths that have cropped up over time — and this is unfortunate, as having life insurance in the event of the death of a loved one can help families thrive better in their time of need.

Still, shopping for life insurance can be a daunting task, especially if you don’t have the facts and figures to back up your decision. It’s important to understand the different types of life insurance policies available and how they can help protect your family in case of an unexpected death. Knowing the facts about life insurance and being able to tell myth from fact will help you make an informed decision when selecting a policy that’s right for you.

 

Common Life Insurance Myths

Life insurance is an essential part of any financial plan. It provides financial protection for your family in the event of your death or disability. It can also provide additional funds to pay off debt, cover funeral costs, and provide a financial cushion in the event of job loss or other life events. Life insurance is an important way to protect your family’s future and ensure that they are taken care of if something happens to you. However, there are many misconceptions surrounding the purchase of life insurance that keep some families from taking advantage of this important tool, such as:

 

1. Purchasing Life Insurance is an Expensive Proposition

Many people think life insurance is prohibitively expensive, but nothing could be further from the truth. In fact, the average cost of a 20-year, $500K policy purchased by a 40-year-old is a mere $26 per month. While this rate will vary depending on age, health, and carrier, it shows that for most people, having the peace of mind that life insurance provides is very much within reach.

 

2. Life Insurance is Unavailable for Those with Preexisting Health Conditions

Don’t let a preexisting health condition keep you from getting the protection you — and your family — needs and deserves. Many insurance companies offer policies that are explicitly created for people with specific health conditions. Alternatively, some health insurance products, such as guaranteed life insurance, do not rely on medical history or health status for eligibility.

 

3. Single People or People with No Dependents Don’t Need Life Insurance

Again, life insurance is part of a strong financial plan. You can use it to provide an inheritance for a relative, offer relief to cosigners on loans and mortgages, support a charity in the event of your death, or help business partners buy your share of the company upon your passing.

 

4. Company-Provided Death Benefits Are Enough

Many people receive employee death benefits through their place of work. While this form of insurance may be fine if you are young, single, and healthy, these benefits are not reliable — and often not enough — as you age and take on more responsibilities. For example, companies can modify — or remove — these benefits at any time and if you change jobs or retire your coverage will end, leaving you without protection.

 

5. Young, Healthy People Don’t Need to Worry About Life Insurance

Nothing could be further from the truth. In fact, when it comes to life insurance, the best time to buy is when you are young. This is because life insurance premiums increase with age, and the younger you are when you purchase a policy, the more affordable it will be. Additionally, buying life insurance when you are young provides financial security for your family and loved ones in case of an unexpected death. It also allows you to lock in a rate that will not change as you get older or develop health conditions that may make it difficult to get coverage later.

 

6. There Are Better Ways to Invest Money Than Life Insurance

Every investment vehicle has a series of advantages and possibly disadvantages, so you must take time to compare insurance policies to determine which is right for your investment needs. Seeking help from a competent insurance agent can help you sort through the ins and outs of life insurance purchasing and select the policy that will bring you the greatest financial edge. Importantly, life insurance policies have a distinct advantage over many other investment options in that most of them provide assets that are delivered tax free.

 

Schuetz Can Help You Separate Myth from Fact 

Purchasing life insurance can be a complicated process, so it’s important to make sure you have the right policy for your needs. An insurance agent can help you navigate the different options available and find the right policy for your situation, providing advice on what type of policy would best meet your needs, as well as information about the various features and benefits of each policy. They can also explain the financial implications of each option and help you make an informed decision about which one is best for you.

At Schuetz Insurance, our agents have years of experience helping our customers separate fact from fiction when it comes to life insurance products. So, whether you are looking for a long-term investment asset or simply peace of mind for your family in the event of your passing, we can help you make the right insurance purchase for your needs. Contact us today and learn more about life insurance and how it can help you — and your loved ones — stay financially secure.