8 Myths About Life Insurance

Ultimately, the appeal and benefit of life insurance is that you genuinely love your spouse/partner/children and would never want them to suffer because of something you did or didn’t do.  However, despite our love of family, 42% of Americans lack life insurance, and about 50% of those who have it are covered for $100,000 or less, according to a recent bankrate.com survey.

Most of us have tight budgets yet still find ways to have fun.  Admittedly, fitting life insurance into your budget may require making small sacrifices, but it’s worth it.  Are you willing to give up going out for dinner a few times a year or make that daily cup of coffee at home instead of buying it to have peace of mind knowing those you hold most dear have a financial safety net in the event of an unexpected tragedy?

Maybe it’s the natural human aversion to thinking about our mortality combined with various myths about life insurance that results in procrastination and avoidance of this topic. If you’re among those who have avoided addressing your life insurance needs, we’d like to encourage you to take action by dispelling some life insurance myths.

1. Life insurance is expensive. Cost is often given as a reason for not purchasing life insurance; however, 80% of those who provide this reason overestimate the cost. A wide variety of policies fit different needs, and term insurance policies are highly affordable. A $200,000 20-year term policy for a healthy, non-smoking male, age 35, costs about $150 a year.
2. If you have health issues…you won’t qualify.  While good health makes life insurance more affordable, having a health condition doesn’t automatically mean you’re uninsurable. Some companies write policies for a range of health conditions if they are under control; however, they will be more expensive and often have lower limits.
3. Life insurance provided by your employer is enough.  Even if you enjoy this benefit at work, it may not cover your needs. If you leave your job, you may lose your life insurance, and if your health deteriorates, you may be ineligible to purchase a policy later. Even with a conversion option, buying your policy may be more cost-effective now.
4. Buy term insurance and invest the difference. Term insurance is of great value and is suitable for covering debts and other expenses within a specific time frame. Yet, a permanent policy may be more advantageous if you have needs that require coverage for your entire life. If you had to purchase another term policy later in life to extend coverage, buying a non-term policy at the outset might be more cost-effective.
5. You’re young and don’t need to be concerned about life insurance yet. When you’re young, the annual premiums are less expensive. While you may be paying a premium for longer, the lower premium can fit into your budget more quickly as you age. Also, the longer you wait, the greater your chances of having a health issue, making it more expensive or challenging to get coverage.
6. You’re single and don’t have dependents, so you don’t need life insurance. Even if you’re single, you probably have debts that could burden your family or executor. Also, just because you’re single now doesn’t mean you will be forever. Getting life insurance now may be more affordable than waiting.
7. Only breadwinners need to be insured. Stay-at-home spouses provide much value in maintaining a household and providing child care. The cost for a surviving spouse to pay someone to handle those tasks could cause a financial strain. Both adult contributors to a household should be insured.
8. Shopping many different agents saves money. Every company has different insurance criteria, which makes the process time-consuming and challenging to undertake on your own. Even talking to multiple agents can be confusing as you’ll have to make sense of all the differences. By working with one trusted agent that deals with many companies, you will find that they can do the work for you and use their expertise to narrow it down to the best options, saving you time and money. At Murphy Insurance, we work with over 50 companies for the best solutions.

If you’ve never talked with an insurance professional about life insurance, you owe it to yourself and your loved ones to get the facts. Don’t make assumptions about affordability or options….Please don’t wait until it’s too late. Contact Us so that we give you the information you need to make an informed decision.