Myths About Life Insurance Policies
Living in the moment might be a very good approach to life, but it doesn’t work in the world of financial planning, future securing and insurance. Life insurance is not a simple thing. There are many elements that must be considered carefully even in term life policies, in order to achieve the proper type of coverage. There are a lot of misconceptions associated with Insurance. Insurance is mostly viewed as a tax saving tool and hence enough cover is not taken to cover you and your family under necessary circumstances.
This article will help you briefly examine the most popular myths surrounding life insurance and the realities that they distort and present.
Myth 1- I’m Single and Don’t Have Any Family or other Dependents, so I Don’t Need Coverage:
Single persons definitely need life insurance at the very least to cover the costs of personal debts and medical bills. If you are uninsured, you may leave a legacy of unpaid expenses for your executor to deal with. You most certainly need a policy to take care of your retirement worries as well. Plus, this can also be a good way for singles to leave a legacy to a favorite charity or other cause.
Myth 2- Insurance will only benefit after my death:
Insurance policies provide protection to you and your family. One of the main objectives of taking insurance is to provide financial coverage to your family in case you are not around but this is not the only objective. Insurance also helps you to build a protection for yourself by providing you with a comfortable retired life and taking care of your lengthy medical bills.
Myth 3- I’m young and healthy hence, I don’t need life insurance:
No-one really knows what’s just around the corner — accidents and illness do happen. If you wait until you are old or get sick before thinking about life insurance, it is likely to cost you much more and be extremely harder to obtain. Generally, once you have your life insurance policy, you can keep on renewing it by providing premiums on time. This is regardless of changes to your health or occupation.
Myth 4- Only breadwinners need life insurance coverage:
Your stay-at-home partner may not earn an income, but think of everything that he or she does to keep the household running. The cost of replacing the services formerly provided by a deceased homemaker can be much higher than you think, and insuring against that monetary loss makes sense. Life insurance can square the cost of hiring help or changing jobs to accommodate a new lifestyle in your partner’s absence.
Myth 5- Term life insurance is always the right fit:
Term policies usually last for a certain period of time, so if you don’t renew your policy after that period, it does not exist anymore. Term life insurance often gets more expensive as time goes on, while in Universal life insurance you always have to pay the same premium, and is considered to be one investment in life that is guaranteed to pay off.
The Bottom Line:
These are some of the most prevalent misunderstandings and myths concerning life insurance that the public faces today. The most important thing for you to understand is that you should never leave life insurance out of your budget unless you have enough assets to cover expenses in your absence. For further details and information, you should consult your life insurance agent or financial adviser.