No one wants to think about death or debt, especially in combination. But unless you have something lined up, your death could be a financial burden to the ones you love most. If you have debt, it might be time to consider life insurance. Here are 10 insurance-related myths, debunked, to help you decide whether or not life insurance is right for you.
Myth #1: I’m young. I don’t need life insurance.
Your age isn’t really what’s important here. What’s important is whether or not you’ll be leaving anyone behind who would be worse off financially. Even if you have no dependents, someone will still be responsible for your student loan, and your car payments.
Myth #2: Life insurance is unnecessary if I don’t have kids.
True, there’s much less at risk if you don’t have children, but what about your partner? Chances are they rely on your income to a certain degree. Ask yourself, “Could my partner manage all of our current financial obligations alone?” Maybe, but probably not.
Myth #3: My employer provides coverage. I don’t need more.
Many larger companies offer their employees free life insurance; sometimes it even amounts to twice their salary. Even if you’re lucky enough to have such an employer, if you change careers you’ll lose that coverage. It may be difficult or even too late to purchase the coverage you need.
Myth #4: Life insurance is too expensive.
Actually, life insurance probably costs a lot less than you think. As average life expectancies continue to rise, the cost of life insurance decreases. Take the time to compare prices before you write insurance off as a waste of money.
Myth #5: All insurance policies provide the same coverage. The only difference is price.
All policies are not created equal. Read the fine print – they might have similar names, but chances are they are very different.
Myth #6: My health is poor. I could never get coverage.
Never assume that because your health is poor you won’t get coverage. There are companies out there that specialize in this type of coverage. Don’t be discouraged if you’ve been declined. Shop around. There’s something out there for you.
Myth #7: I probably won’t need it, so why waste my money?
You’re right. Chances are you won’t need it, especially if you’re still quite young. It’s unlikely that you’ll die in your younger, working years – that’s why insurance is so inexpensive then. Most people who purchase life insurance don’t expect that they’ll have to use it, but if they do, it’s there. You need to ask yourself whether of not a worst-case scenario would be catastrophic to your family. If the answer is yes, then life insurance could provide added security, protecting the ones you love.
Myth #8: The higher the price, the better the coverage.
For most people, term insurance, which is more inexpensive than whole life insurance, is actually the better choice. You buy term insurance for the amount of time you think you’ll need it – until your debts are paid off, your kids are in university, or you retire. Shop around – price doesn’t always make the policy.
Myth #9: In a single-income home, only the breadwinner needs coverage.
This might sound heartless, but the cost of ‘replacing’ your loved one probably isn’t cheap. You might think that the sole-provider is the only one who should be covered, but think about what ‘services’ the other provides. Likely, if you couldn’t fulfill those duties on your own, you’d have to hire someone to do them for you. The deceased homemaker’s duties, like cleaning and childcare, still cost money.
Myth #10: It’s such a hassle to get insurance.
The insurance man has a nasty habit of bringing out the worst in us. If you, like many others, are afraid of your insurance salesperson, there are answers. You can use simple online tools to compare prices, options and insurance needs. You can request a call back from a licensed insurance expert online. The hassle you feel applying is nothing compared to the hassle your loved ones will feel when trying to manage your debts. At the very least, shop around. You might be surprised by how little a sense of security actually costs.
Writer for RateSupermarket.ca