Most of us know that life insurance is a policy where premiums are paid so a death benefit can be paid to a beneficiary or beneficiaries. However, not many understand that life insurance can be used for other purposes, such as saving for retirement or replacing lost income in the event of disability.
There are a lot of myths and false beliefs floating around that cause people to hesitate to get life insurance, even though this might be the best decision they make for themselves and their loved ones. Today, we’re breaking down the top 4 myths surrounding life insurance policies and spilling the real truth about its many benefits.
One of the most common misconceptions regarding life insurance is that it’s only important later in life. For numerous reasons, purchasing life insurance when you’re young and healthy is a smart move. Term life insurance policies are less expensive in your younger years, and you might be able to convert them to permanent coverage such as whole life insurance later on.
The purpose of life insurance is to minimize uncertainty and risk. The risk here isn’t only limited to an untimely death—living a long life comes with declining health and increasing medical bills. Purchasing insurance will give you peace of mind regarding your future financial stability.
Another myth about insurance is that they don’t need coverage if someone doesn’t have a job. This is not true because many households rely heavily on the labor of stay-at-home parents. Without them, the surviving partner would need help with child care and housekeeping.
Think about all the things you do that save money for your family that you could be paying someone else to do. The costs of tutoring, daycare, and babysitters can add up quickly, but families with one parent who stays home can often avoid these expenses. If you have a spouse or children who depend on your salary, even if it’s not a lot, your untimely death could have serious financial consequences for them.
Many people rely solely on their employer-provided insurance, but this is an unwise move for many reasons. The truth is your employer only insures you for the duration of your employment. When you leave your job or retire, your coverage will end. Changes in the company’s financial situation could result in the policy being terminated or significantly reduced benefits. If that happens, you’ll be left high and dry when you need your coverage the most.
Your company’s health insurance also won’t be sufficient to support a family, and its growing needs. Furthermore, the coverage may only offer a (death benefit) lump sum payment upon the insured’s death. If you don’t have a financial strategy before you retire, you’ll be on your own.
You should get a separate, future-proof insurance policy in addition to the coverage offered by your company. Make sure you and your loved ones are financially secure by investing in a policy that will support your ongoing living expenses and provide for them in the event of your untimely death.
Most people don’t realize that getting a good deal on life insurance is much simpler and more affordable when you’re young and healthy. Secure as much insurance as possible, and if money is tight, you can upgrade your policy later. If you are on a fixed income or your health makes it difficult to qualify for a conventional policy, you can get a life insurance policy that doesn’t require a medical exam.
Older people should think about getting final expense insurance. The death benefit on this sort of insurance is typically so minimal that it can only be used to cover final expenses (like burial and funeral service), which is why it is also known as “burial insurance.”
Life insurance is more important than you realize. At Franklin Life and Annuity, we’re committed to helping families find affordable and comprehensive financial protection. Get in touch with our team, and we’ll be happy to address all your doubts and misconceptions and even develop a personalized financial protection plan based on your needs. Our final expense insurance and life insurance services in Houston, TX ensure that your loved ones are protected in case something happens to you.