So much of our lives are spent in anticipation of the major life events we will experience over the years. These events follow the progression of one’s life and often act as a checklist waiting to be completed. Becoming a licensed driver, graduating college, getting married, having children, etc. But there is one life event that the majority of us avoid thinking about. It is a question that we flinch at when we ask ourselves: “What happens to my loved ones after I pass away?”
The solution to this is life insurance. You have heard the term before and if you aren’t already in pursuit of securing a plan for yourself – or technically, your family members – you are aware that it is something you will have to think about eventually. What many people aren’t aware of is that there is a significant amount of false information out there pertaining to life insurance. Here are the top 4 myths that I believe are the most important to uncover:
1. No wife? No kids? No need!
You may be single now, but if you are eventually planning to get married and start a family, why not start building up that financial safety net as soon as possible? Or if something were to happen to you before that point, your life insurance, in addition to covering the costs of your burial, can also help to pay off any debts you may have under your name so it isn’t passed on to your other family members.
2. It is unaffordable.
If this is your mindset, you are not alone. Over 80% of consumers mistakenly believe that life insurance is too expensive for them. There is not a one-size-fits-all coverage. Like most plans, there are a variety of policies available to fit a diverse range of needs. You will be able to find a policy that will work within your budget initially and then you can change it as your finances grow.
3. It’s only purpose is to pay funeral costs.
Some people refer to insurance as “death insurance” because they believe its main purpose is to pay for the funeral costs of the deceased. However, that only depends on how much money is available in your policy. One of its other main functions is to replace the income that has been lost as a result of the sudden passing. Even though the circumstances are less than ideal, it allows the family to mourn instead of having to worry about finances on top of their grief.
4. My policy stays with me after I leave my job.
Unfortunately, most employer-offered insurance policies do not go with you after you leave that specific job. This is why some people opt for separate policies.
No one enjoys talking about their death, but it’s important to have this conversation as soon as possible so that your loved ones are protected if anything were to happen to you.