Life Insurance Myths | Top Five Life Insurance Myths Debunked

Top Five Life Insurance Myths Debunked

• If you're young and healthy and don't have any dependents, you probably don't need life insurance. But guess what? You won't stay that way forever. 
  
• Time doesn't stand still, and you're getting older every day. 
• Before you know it, you could be married, have a mortgage, start a family, and/or develop a serious health condition. 
  
• The ideal age to buy life insurance is in your 30s.
• You get the best bang for your buck as life starts getting more complicated. 
• Yet so many people in this demographic don't have a life insurance policy. 
• Have a life insurance policy. 
• They either don't think they need life insurance, I am unaware of the benefits, or I have been duped into buying life insurance based on myths.
• 
  

Workplace life insurance is sufficient

• Top firms offer competitive benefits packages, including health insurance, dental insurance, life insurance, 401(k) plans with employer matching, etc. 
• Thus, employees who get life insurance through their employer often assume they're sufficiently covered.This might be true for frugal folks who are single with no dependents and no plans to settle down. 
• But life changes frequently, and time goes by quicker than you may realize.Quicker than you may realize. 
• In reality, the amount of group life insurance coverage offered by employers is rarely enough.

If you're unsure how much you need, please read this guide on the right amount of life insurance coverage. Read this guide on the right amount of life insurance coverage. Insurance coverage. Most employees need 10 times the amount of life insurance coverage offered by their employer to properly provide for their families. 

In addition, the number of employees who have access to life insurance benefits through their employer has been declining for the past 15 years. Another important fact is that workplace life insurance policies are not portable. In other words, a life insurance policy offered through your employer terminates if you quit or unexpectedly lose your job. 

 

Thus, gaps in employment can lead to gaps in life insurance coverage when you are financially vulnerable. Having supplemental private life insurance can ensure continuous coverage for your family. And you can get as large or small a policy as you need.

 

You Only Need Coverage 2X Your Salary

There's a common life insurance myth that you should determine how much life insurance coverage to get by multiplying your annual salary by two. This isn't a great way to calculate how much life insurance you need.

1. First, your specific situation is likely vastly different from that of your colleagues making a similar salary.
2.  Second, there are just too many factors at play to use a generic formula like that.

What is helpful is to use a cash flow analysis of your current and projected spending. Look at how much outstanding debt you have now and if you anticipate making any large purchases such as a car, house, or education expenses. You should also consider medical bills and funeral costs. Most people don't realize that funerals can cost tens of thousands of dollars.

 

Buying Life Insurance Is Overwhelming

• While buying life insurance before the internet may have been daunting, it's easier than ever now. Although it may have been daunting, it's easier than ever now. 
• Thanks to technology and insurance marketplaces like Policygenius, you can get free, confidential quotes in minutes. 
• Even though there are many different types of life insurance, the vast majority of people are best off with term life insurance. 
• Term life insurance is straightforward and the most affordable. 
• Simply pick a coverage amount ($) and a duration (time), pay monthly or yearly premiums, and if you die during the policy's term (ex. 10, 20, or 30 years), your designated beneficiaries will get paid the lump sum of your coverage amount.

Once you buy life insurance, You're locked in forever

• In my 20s, I thought life insurance was something you'd be stuck paying for your whole life once you bought it. 
• While life insurance companies would love it if that were true, it's simply not so. 
• When you buy life insurance, you're not obligated to pay for it until you die or your term ends. 
• You can cancel your policy at any time, switch carriers, buy additional coverage, and even have multiple policies with different insurers.Usually, you won't get better pricing as you age. 
• But, I was able to get more life insurance for less money simply by shopping around. 
• The pandemic and the birth of our daughter spurred me to renew my policy.

Life Insurance Is Expensive

• Many people don't think they can afford life insurance due to the false perception that it's very expensive. 
• But it's more affordable than you may think. Here's a look at how much life insurance costs by age and gender. 
• Age and gender. 
• In reality, the average 40-year-old male can get $350,000 in coverage for less than $30 per month and $2 million in coverage for less than $60 per month. 
• An average 50-year-old woman can get the same coverage for around $35 per month and $48 per  month, respectively. Coverage for around $25/month and $58/month, respectively.
  

You have to wait 30 seconds.

Full Project