How gullible are you? Find out the truth about these 4 misleading life insurance lies that you’ve been believing, and save yourself and your family from stress and financial problems in the future.
Employer-Based Life Insurance Is All You Need To Be Fully Covered
Starting with the easiest of lies to detect, this should have been a red flag for you if you’ve heard this. While your employer-based life insurance can certainly help you out, it will not be enough to protect you for all your possible life insurance needs. Remember, you buy life insurance to protect you in the case of the unexpected. Now, what happens if you only have employer-based life insurance, and you lose your job? I bet you didn’t expect that to happen either. You will likely be left with no coverage and then be forced to pay higher premiums on life insurance that you may not be able to afford with your lack of income. Save yourself the stress, and think of your employer-based insurance only as a supplement policy.
Double Your Income Is The Coverage You Need
For some reason, this has become a well-known suggestion in the life insurance business, but it is a flagrant myth you ought to ignore. While 2 years of your income may seem like a good sum of money to pay your funeral costs, and sustain your family, think long and hard about that. Funerals can be pricey, and often cost more than you expect. Now, factor that in to the funds your family will need to sustain yourself after your death. If you are still working and supporting your family, this money will easily run out. Also, if you have a permanent or whole life insurance policy, which you can take out living benefits, you may want to purchase a higher policy in case of an emergency. While you can borrow against these kinds of policies, you may not be able to pay it all back, and then upon your death, your beneficiaries will not receive the death benefit you had expected due to the lack of repayment on your part. Do yourself a favor and provide a bigger cushion for your family.
Only The Main Provider For The Family Needs Life Insurance
While you may be the breadwinner for your family, and your loss could have the highest financial impact, it doesn’t mean that each and every life is not important and should not be insured. What happens if your spouse has an accident and suddenly dies? You may be covered, and can take out money from your insurance policy but what if you can’t repay it? Then your family will be out of luck when you eventually pass away. Or, on the other hand, if you have a term life insurance policy, you may not be able to take out money before your death. So if your spouse or even your child has a tragic an unexpected illness or death, you may go into financial debt and never be able to repay it, or even be able to keep up with your premiums, leaving you uninsured and out of luck!
No One Is Dependent On Your Income, So You Don’t Need Life Insurance
This is a classic rookie lie told in the life insurance industry. It can also be interchanged with, “you have enough money to pay for your funeral on your own, so you don’t need insurance.” Don’t fall for either of these blatant life insurance lies. Just because you are financially stable now, and have no dependents to support, you still may be overlooking some unexpected costs or debts you will need to pay upon your death. What happens if you have an allotted amount of money saved for your death, and inflation kicks up, or unexpected expenses arise? Who is going to pay for that? Your family will end up having to pay out of pocket for your funeral and they will be left with a financial burden. This is what you buy life insurance for, to be prepared in this situation. The worst that could happen with life insurance, is that you will have money left over after your funeral expense that you can provide for your extended family, or even donate to a charity or other cause to leave behind your legacy and help others. What could be wrong with that?
While these may be the most prominent and most lethal life insurance lies that you will hear, keep your head on straight and do your research to detect any other myths you may come across. Your life insurance is not something to take lightly, so be aware of these lies so you can get the coverage and peace of mind that you need.