Even though life insurance is a critical investment, there are a significant number of Americans who either have no life insurance coverage at all or are significantly underinsured for their particular life stage. When asked why they refused or didn’t increase their coverage, these individuals offered a variety of excuses for not investing—and yet, even given their often reasonable concerns, many of these long-held beliefs are either inaccurate or far more nuanced than some people give them credit for.
In order to ease your concerns about purchasing life insurance, we’re going to be exploring some of the most common myths about life insurance and helping you to understand the reality of life insurance coverage.
Misconception #1: I Don’t Need It
It doesn’t matter how old you are, where you work, what size your family is, or how healthy you are: life insurance is absolutely necessary. There’s no designated time when everyone should purchase a life insurance policy; while you may have different needs at different stages of your life, at the bare minimum you should always have enough life insurance to cover any personal debts and your potential funeral costs.
One of the most common beliefs is that only family breadwinners or individuals with children or other dependents need life insurance, but life insurance can be beneficial in the event that you have co-signed debts, you own a business, or you want to provide for loved ones in the future.
Misconception #2: It’s Too Expensive
According to a 2015 survey, 80 percent of Americans vastly overestimated the cost of a given policy—some inflating the cost by more than double. The cost of a policy is the result of many factors, with the most influential being the type of policy, the amount of coverage you want, your age, your health, and your lifestyle.
In truth, there are plenty of options for a variety of situations, and an agent will be able to help you to find a policy that provides the right amount of coverage for your budget. If you’re still concerned about the cost, adjusting your lifestyle (by healthy means such as losing weight, cutting back on or quitting smoking or drinking, and improving your driving habits) can help reduce the cost of your premium.
Misconception #3: I Don’t Qualify
It’s a common misconception that the life insurance application process is long, difficult, and fruitless for individuals with health issues. This is not the case. The questions asked in a life insurance application are simple, straightforward, and meant to assess your overall health, and certain health conditions may affect your premium.
Misconception #4: My Employer Provides It All
Life insurance is a great employee benefit, but the coverage your employer offers might not be enough. While employer-provided life insurance may be 1-2 times or even up to 4-6 times your salary, this typically does not include commissions, bonuses, or second incomes, and if you have dependents, you may need even more than the amount described above.
Employer-provided life insurance is typically bundled with your employment, so if you retire or you leave the company, you will not retain the coverage. An employer-provided policy is fine to take on as extra coverage, but you should also have your own policy, as you will need it at some point.
Misconception #5: It’s Too Confusing
In a 2017 study, 83 percent of Americans reported that they would be more likely to consider purchasing life insurance or increasing their coverage if it were easier to understand. Life insurance may seem overwhelming, but completely eschewing it is not the solution.
There are many varieties of life insurance, but the most common ones are fairly straightforward, and an insurance agent would be happy to explain the intricacies of the various policies.
About National Catholic Society of Foresters
At National Catholic Society of Foresters, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a Fraternal Society, which means the sales from these financial services products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. Our portfolio is extensive, ranging from various life insurance policies to IRA’s to support your financial needs no matter what stage of life you’re in. For more information, contact our friendly experts today at (800) 344-6273.