Approximately 41% of American adults do not have life insurance. Of those who do, 50% admit that their coverage is not adequate. Yet, 93% of Americans understand that they should not live without life insurance.
Several factors have led to this frightening situation, and one of them has to do with the complexity of life insurance. There are a lot of myths floating around in the industry and they include:
"If I'm Single and Without Children, I Don’t Need Coverage"
The reasoning here is that since life insurance benefits are usually paid after death, those who do not have dependents will not need the money. The reality is that the money is also usually used to cover other financial obligations of the deceased. It can be used to cover debts (think student or auto loans) that may otherwise be passed on to family or loan co-signers. It can also be used to cover your funeral expenses, protecting family and friends from this expensive obligation.
"My Employer Takes Care of My Life Insurance"
Sure, life insurance is one of the benefits offered by many employers. The fallacy here is believing that this coverage is enough, or even permanent, because it is not. This form of insurance is only valid as long as you are still working with the company. If you get laid off, take a different job, or even have to leave because of illness, you could be left without coverage when you need it most. Besides, it usually amounts to a modest amount of money, say equal to your annual salary. You need a permanent form of life insurance with enough coverage to meet all your financial obligations and take care of your family.
"Life Insurance Is Way Too Expensive"
In this economy, it's understandable that many people think this way. The cost of life insurance, however, has decreased considerably in the past few years. This is mainly due to the increased average life expectancies. If you are healthy and don't smoke, you stand a good chance of getting fantastic coverage at very low rates. Rates of $250,000 at $15 (or less) for a 30-year-old male or $500,000 at $31 (or less) for a 40-year-old nonsmoker are very possible.
"If I Have Health Problems, I Can't Get Life Insurance Coverage"
Some people believe this to the point of not trying to get life insurance when they are sick. The truth is that there are many life insurance companies that sell policies to people suffering from common illnesses. Some firms even specialize in these cases. It's true that you will probably pay higher premiums than people with perfect health, but that's a big difference from being completely disqualified.
"I Only Need Life Insurance If I'm the Breadwinner"
If you think the breadwinner is the only person who has responsibilities in the house, think again. There are many duties within the home that would quickly rack up the bills if a homemaker wasn't available. Think about a stay-at-home parent who cleans the house, does the laundry and takes care of the children. If that parent passed away, life insurance would make the different in filling that gap, providing money for childcare, housekeeping, or the many other gaps created by a loved one's death.
Now you know the truth from the myths! If you have more questions about life insurance, feel free to call our office. We have a Life Insurance Specialist on staff to answer all of your remaining questions and offer a free assessment of your life insurance needs. Call 616-897-1515.