Myths and Facts About Life Insurance
Eliminating Myths in Decision Making
Many myths exist; years ago, the commonly held belief was that if you sailed too far West since the world was flat, you would fall off the edge of the world and perish. However, it was discovered that the world was round. There are also myths, misconceptions, and false conclusions about life insurance. Determining between myths and facts about life insurance decisions can be confusing.
There are many misconceptions out there that keep people paralyzed. Term life insurance has many advantages. But understanding term life insurance and its benefits mean sifting through incorrect conclusions and false beliefs many have surrounding life insurance in general.
These life insurance misconceptions seem to have a life of their own and must be dealt with by many families purchasing life insurance. Believing these myths can result in parents who trust them from purchasing too little life insurance coverage, or obtaining no coverage at all. These beliefs have caused financial hardships and heartbreak for families suffering from the loss of a loved one.
To avoid this from happening to you, consider a closer look at the most common beliefs about life insurance to set the record straight. You must make the right decisions regarding purchasing life insurance and not let these beliefs be your guide in the decision-making process. Check out this guide to buying life insurance.
False Conclusion #1: I’m Young, So I don’t need life insurance.
False! Myth or fact? Let’s be honest OK, as parents thinking about our mortality is not a topic anyone enjoys, but our death is one of the realities of life. Young parents die every day not just for medical reasons but in various types of accidents.
Why gamble and take a chance, especially if you are married with children by ignoring life insurance completely. Although it is unlikely you’ll die during your working years, you’re not insuring for what’s likely to happen but instead, for the worst-case scenario. But few people have the funds readily available to fulfill all their wishes for their family or meet their obligations after their death.
That’s why term life insurance is inexpensive for young, healthy people and can often be purchased without a medical exam. Buying life insurance now means you’ll be providing financial security without spending a lot of money on it.
For example, online quotes show that a $250,000 10-year term policy for:
- a healthy 35-year older woman costs as little as $15 a month.
- a healthy 35-year older man cost as little as $17 a month
What’s more, you may even be eligible for preferred life rates that mean the annual premiums are even less! Preferred rates are lower premiums – for the same coverage – offered by an insurer based on your health. Having good health reduces premium costs and can eliminate medical exams. The good news is that eligibility for preferred rates is common and could save you up to 30 percent off the standard rate. It is amazing how little $1,000,000 will cost you if you are in your 20’s or 30’s.
False Conclusion #2: I don’t work outside the home, so Life Insurance is not needed.
False! Myth or fact? Just because there’s no paycheck to replace, doesn’t mean life insurance is unnecessary. A life insurance policy that provides coverage for a stay-at-home parent or single parent isn’t so much about the money they bring into the household, but instead about the money, they keep in the household.
Have you ever considered how much it would cost to pay for childcare and housekeeping in the absence of a stay-at-home parent? Don’t underestimate how much this would require; child care is expensive and is an increasing cost.
False Conclusion #3: If it’s cheap, there must be a catch.
False! Myth or fact? There’s no catch to term life insurance. Your basic term life insurance policy will offer you coverage so long as you pay your premium. You buy term insurance coverage for the duration of time you’ll need life insurance, whether that’s until the kids are out of school or until your mortgage is paid off.
Plus, your premiums are fixed for the length of the term. They won’t increase even if the status of your health changes. You are merely paying for “pure protection” with no cash buildup within the policy. Many well-known and highly rated companies offer quick-issue-term life insurance.
False Conclusion #4: I have life insurance through my job. I don’t need any more insurance coverage.
False! Myth or fact? The truth is your life insurance coverage through your work may not be protecting you and your loved ones as much as you think. Review how much your employer-paid insurance provides and calculate whether this is enough to keep your family comfortable through the difficult times if you’re not around.
Group Life is Never Solely Recommended. Unlike other valuable employee benefits, defective supplemental Group Life is in a substandard high-risk pool and always overpriced by about 200%. Compare the charges that quickly increase with age and avoid paying for this extremely high-cost coverage. Group Life always seems cheap, but the premium charged 26 times a year increases rapidly with each 5-year age bracket. The premium and coverage are not guaranteed. With a certificate, you rent, it is not a contract you own.
It is not portable. You lose the coverage when you leave your job for any reason, including retirement, your coverage usually stops. So, you relied on your group life insurance, and now you find out that you need life insurance. Usually, you need a great deal more life insurance than you a provided with on your group policy. How much insurance do you need?
False Conclusion #5: I don’t need life insurance once my mortgage is paid off, and my kids have “left the nest.”
False! Myth or fact? Everybody’s insurance needs vary. But how would your spouse manage daily living expenses without your help? And what if your spouse outlived you by 10, even 20 years?
Even if your children are no longer living at home and you no longer have large debts, like a mortgage, there still are questions you should consider before deciding that life insurance is unneeded. You may want to leave money to send your grandkids to college or leave a legacy for your children.
False Conclusion #6: Myth or fact? It’s difficult and exhausting to qualify for life insurance.
Thanks to the Internet, getting quotes and having a policy issued is fast and easy. Many companies today use a process called “accelerated underwriting“ that can sometimes eliminate the life exam and get you a new policy sometimes in days. You can begin the process and do it yourself. You can calculate your life insurance needs, review additional quotes, select a product and insurance company, and even complete a basic online insurance application. Or you can call us and get started by following the steps below.
Expert Product Review
False Conclusion #7: I’ll put what I would pay for a life insurance premium in the bank instead to cover my final expenses.
False! Myth or fact? Really, how long would it take you to save enough to cover the $250,000 needed for final expenses saving $100 a month? After 30 years, not counting interest, you would have a total of $36,000! A little short of the $250,000 needed. If you had life insurance, the insurance company would be making a check out to your beneficiary for the $250,000 even if the policy was in force for 24 hours.
Avoid Captive Agents
Many of the websites offering life insurance are call centers with cubicles of agents using a script to sell life insurance. Some of the websites sell your information to 10 or more agents, which results in you receiving many calls. We are not a call center. We are experienced, independent brokers. Captive agents must offer life insurance products from the company that has contracted them to solicit insurance. So you have one or maybe two companies to choose from.
A captive agent limits your choices of finding the best company at the best price, with the quickest turnaround time. Also, be aware of many of the larger agencies that continuously advertise on the radio, which in reality only represents a handful of companies.
Why Use Strahan Financial Services
We work with a team of highly talented individuals committed to providing you with unmatched professional service with over 250 years of combined experience. Our staff has extensive knowledge of the insurance industry. We only represent the top 1% of the marketplace. We know the companies, the products they offer, and we use the latest technology to improve your experience and get your policy issued as fast as possible at the least expensive rate.
Some of the top-rated companies we work with are Mutual of Omaha, Transamerica, SBLI, Protective Life, American General and Prudential, and Pacific, to name a few. We are not obligated to any company, finding the company that is the right fit for you, at the lowest possible price with the best rating and benefits is our goal.
You can complete a needs analysis, health analyzer, receive quotes, select a product, and a carrier and complete an application on your own!