7 LIFE INSURANCE MYTHS AND THE TRUTH

Life insurance can sometimes be hard to understand. Do I really need it and if so, how much? Whether you decide you need life insurance or not, below we clear up some of the most common misunderstandings about life insurance.

Myth #1: I don’t need life insurance. I have some through my job.

Truth: Life insurance offered through your employer is a great benefit–while you have it. If you leave your company, the life insurance coverage doesn't leave with you. Also, the coverage amount is usually a flat amount or equal to a year's salary and that amount may not be enough–for long enough. While you may have the option to convert your work policy to a permanent policy or buy multiples of your salary, a separate life insurance policy stays with you no matter who you work for. To figure out how much you might need, try this simple calculator.

Myth #2: Life insurance is too expensive.

Truth: There are many different types of life insurance to meet your needs and your budget. Some people only want to provide a death benefit for final expenses while others want to leave behind a pool of money for the kid's college, paying off the mortgage and charitable giving. It’s up to you how much coverage you want.

Myth #3: Only healthy people can get coverage.

Truth: Life insurance companies offer coverage to people with a range of common medical conditions including high blood pressure. The coverage may cost more than someone in perfect health so it's important to be up-front with health issues. Life insurance companies have medical underwriters and medical directors on staff so your information is with people who understand your health conditions.

Myth #4: I don't need life insurance because I don't have any dependents.

Truth: Even if you aren’t married or have children, life insurance helps pay for final expenses and settle estate debt like medical bills, taxes, etc. It’s also one of the easiest and most amazing ways to leave a legacy. The benefit can be directed to fund a favorite charity or cause, pay down family members’ mortgages, or send nieces, nephews to college. The legacy is yours and the possibilities are endless.

Myth #5: I'm young and don't plan on dying anytime soon.

Truth: No one plans on dying anytime soon! Life insurance is the type of product you buy before you need it. You don’t wait until your cell phone is stolen or falls in the sink to insure it and you don’t wait until you are sick or old to buy life insurance. The time to purchase life insurance is when you are young and healthy. Your wallet and loved ones will thank you. Trust us.

Myth #6 People have to wait until I die to get any benefit from the policy.

Truth: Many types of life insurance policies have extra benefits called living benefits¹ that allow you to use the policy while you are alive. Living benefits on a life insurance policy allow you to access the death benefit, while you are alive, if you have a heart attack, stroke, cancer, cystic fibrosis, ALS, and other illnesses and injuries. Make sure you ask your agent about these benefits and what conditions qualify on the policy you are interested in.

Myth #7: Only the breadwinner in the family needs life insurance.

Truth: The life insurance benefit covers more than just a missing salary. Parents/spouses who aren’t the breadwinners still contribute financially either through a smaller paycheck and/or household duties. The cost of services provided by a stay-at-home parent is approximately $118,905 annually and a parent with outside employment contributes approximately $70,107 worth of services to the household.²

Deciding if you need life insurance and how much is a personal decision. Working with a financial professional can be helpful for putting together some financial strategies for now and later. There are many financial professionals who specialize in working with families and small business owners.

Learn more about the different types of life insurance that are available.

¹Payment of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy. Receipt of Accelerated Benefits maybe a taxable event and may affect your eligibility for public assistance programs. Please consult your personal tax advisor to determine the tax status of any benefits paid under this rider and with social service agencies concerning how receipt of such payment will affect you. Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Riders are optional, may require additional premium and may not be available in all states or on all products. This is not a solicitation of any specific insurance policy.

²Jordan, Steve. August 27, 2015. Gender gap: fewer women than men have life insurance, leaving families vulnerable.