Life insurance is a very key planning component, but sadly, it suffers from plenty of misinformation. These myths often prevent people from making prudent decisions, thereby leading to inadequate or inappropriate coverage. So, let’s bust some of the common life insurance myths and clear out the confusion.
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Life insurance can only be afforded by old people or the rich- One of the most common myths associated with life insurance is that only older-age persons or affluent people require such insurance. The reality of the matter is that life insurance can be availed by any person with financial dependents; it is utterly immaterial how old one is, or the one’s income level. Most young people qualify for lower premium rates, and, in fact, the benefit of such insurance may not necessarily be constrained by limited monetary means, as protection for loved ones can still be availed of in case of the insured’s passing. To be honest, life insurance is not a luxury but more of a practical tool for the safekeeping of loved ones.
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I do not need life insurance because I am single and have no dependents- For most people, if they don’t have children or a spouse, they don’t need life insurance. Naturally, for them, solitary people may not require as much insurance than those who have dependents. Still, it still benefits in paying off debts, student loans, or other final expenses, such as a funeral, where the responsibilities would fall on loved ones. Additionally, buying life insurance when you are young and healthy can lock in lower premiums to cover future needs.
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There is enough life insurance provided by employers – You shouldn’t depend solely on the life insurance your employer offers. More often than not, most employer policies only give you one to two times your annual income, which cannot sustain your family long if you die. Moreover, the coverage provided by employers is often tied to your job. You may end up losing it if you lose your job or get fired. You must have an individual policy to support your employer-sponsored coverage for adequate coverage.
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Stay-at-home parents don’t need life insurance- Many are undervaluing the work of stay-at-home parents, thinking life insurance is not necessary since they are not working. Nevertheless, the contribution of stay-at-home parents to the family is invaluable, as they take care of the children and do much housework and many other things that would be an enormous load on the surviving spouse in case of the death of the parent. Thus, part of life insurance pays for these extra expenses that will surely occur after death, securing the future of the family at the most vulnerable time.
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Life insurance is too expensive- Most people believe that life insurance is expensive. However, the fact remains that life insurance is very affordable as long as it can be bought when still very young. Of the two types, term life can be less expensive compared to whole life insurance. A healthy 30-year-old, for instance, can budget for a huge coverage amount in exchange for the cost of a few cups of coffee per month. Shopping around and making sure you understand what’s available to you is the way to get into the right coverage for the best price within your budget.
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Only breadwinners need life insurance- Another fallacy is that a person should only acquire life insurance if they are the breadwinner. The truth is, though, that both partners, regardless of their income, should have it. If the spouse were to die, the surviving one may find themselves enduring quite a bit of hardship through lost income or having to hire help to perform household duties. Having life insurance for both spouses would ensure financial security for the family.
Life insurance is a great security giver financially, but most people spurn it mainly due to the misconceptions of it. Truth knowing about the myths enlightens a person and leads him to take a rational decision so that complete coverage can ensure the financial security of their loved ones. It can make people feel more confident in securing their family’s financial future by dispelling the most common misunderstandings.