Nobody thinks they need life insurance until they do.
I used to be one of those people that didn’t think I needed life insurance. I was young, I was healthy, and lived a fairly safe life. I didn’t own a home nor was I married with children and didn’t take unnecessary risks. That all changed when my mother started talking to me on a fairly consistent basis to get something in place. To stop the constant reminders, I began to do my research and quickly learned why somebody should have life insurance even if they were single. If I knew what I know now I would have made a very different decision earlier in my life.
Thinking about your death is not easy, I mean who wants to think about how or when their life is going to end. Life insurance is a very confusing subject and that is because most people have not had it properly explained to them. I know what you are thinking…all life companies are evil and are just out to take your money and never pay out the benefit, that notion couldn’t be further from the truth. It is my belief that if those in the life insurance profession spent more time putting clients at ease by explaining what the different types of insurance are and determining the right coverage amount more people would see the benefits of having the proper protection in place.
The idea of insurance is not new to our society we protect things that are most valuable to us, we insure our homes, the contents of those homes, our cars, our phones, our businesses, there are people who even insure their body parts, but fewer people are insuring most valuable item in the world our lives.
The reality is that you may not need life insurance in the current moment, but you will need it in the future. Wouldn’t it be great to know that your loved ones left behind could take time to grieve, not worry about settling the estate or be concerned about where money is going to come from. We all believe that we are going to live these long joyful lives, but the reality is that one night you could go to sleep on not wake up the next morning…. Sorry…too real?
More and more you are unfortunately seeing friends and family having to send out a GoFundMe links in order to cover the final expenses for a loved one. Perhaps you have had to do this yourself. If you have had to this I am truly sorry. I wish someone had given you the opportunity to learn what options were available to you so that you would have had time to grieve without the worry of money.
I do realize that there are some religions that do not allow life insurance be put in place, but there are also some people that don’t believe in life insurance and that may be due in part the misconceptions that exist.
Here are the 5 biggest misconceptions about life insurance:
- I am young I don’t need it…
While you may be young and like me at the time not have family, the reality is that is probably the best time to get life insurance for a couple of reasons. When you are young that is probably the healthiest you will ever be. Life insurance is typically based on your life expectancy and the likelihood that you will pass away from natural causes. Since you are young that risk is low and companies are willing to put coverage in place. Also the younger you are when you put insurance in place the cheaper it will be.
2. If I get insurance I am tempting fate…
The common refrain I heard growing up is “Don’t do things to call death upon yourself.” I am of South American background and like most cultures death is not something that we like to talk about let alone plan for. When it happens you just deal with it. As I get older and hopefully much wiser I don’t let those unfortunate beliefs play a role in the decisions that I make today. Leaving a family unprotected and responsible for your estate and final expenses is not a notion that we can continue to put forth in the community. Yet these notions do have a stronghold in many communities, I still remember a family member scolding me for getting life insurance. I mean have I had insurance for almost 7 years and guess what? — I am still here :)
3. I have coverage through work…
Most workplace coverage is either 1x or 2x your salary, so if your salary is $50k then your insurance coverage is $50K. If you are like most North Americans you are carrying some form of debt. Even if you aren’t when you pass away there is still cost of your final expenses and cost to settle your estate. In most cases your workplace coverage is not enough. Another factor to take into consideration is that the coverage is only available to you as long as you are an employee. What happens if you are laid off? Then what? Life Insurance doesn’t need to cover a large amount but your insurance should be able to cover any debts you have, the ability to replace your income and your final expenses.
4. It is too expensive…
The cost of insurance is based off your lifestyle. If you are dealing with certain health issues, if you are a smoker or a drug user then you will pay more. The reason you will pay more is because you are at a higher risk for the insurance company and more likely to pass away.
The type of insurance that you choose to have depends on your needs and budget Term insurance is cheaper than whole life or permanent, it all depends on your situation. There are many options out there.
5.It never pays out…
There are two major reasons why insurance companies won’t pay our your policy:
- If you have made fraudulent statements when you were applying for your insurance.
- If you stop paying for your insurance and the insurance policy lapses.
As long as filled our your application truthfully and you pay your monthly premium your insurance policy will pay out to your beneficiary.
At the end of the day life insurance is a security blanket that ensures your loved ones are taken care of if something happens to you.
Wouldn’t you like to put them at ease once you are gone?