There are plenty of insurance options out there, but one that is often skipped over is life insurance. A big reason people forgo life insurance is the myths and misinformation that surround the benefit.
Whether you believe life insurance is not appropriate for your lifestyle or you think you can't afford it, it's easy to see why the decision can be confusing.
Below, we're breaking down the most common myths to help you understand why life insurance is for everyone.
1. Life Insurance Is Expensive
Many people avoid purchasing life insurance and write it off as an extra expense they can't afford. The reality is that life insurance, like many other types of insurance, is adaptable and can be catered to your needs and budget.
If you're looking to cut costs, consider a term life policy over a whole life policy. Similarly, you can compare companies or connect with a specialist to help you find the perfect plan for you.
2. I Can Only Have One Life Insurance Policy
It is possible to have more than one life insurance policy to help bridge any gaps in coverage. The primary restriction on having more than one life insurance policy is that one cannot over-insure themselves.
A typical instance where this makes sense is if your employer offers a limited life insurance plan, but your life circumstances have changed - like the birth or adoption of a child - and you need more coverage than your previous plan.
3. I Don't Need Life Insurance If I Don't Have Dependents
One of the greatest benefits of purchasing a life insurance plan is that your dependents will have access to funds in the event of your absence. However, that is not the only reason to purchase life insurance.
If you do not have children, a spouse, or other dependents, you can name a family member or business partner as a beneficiary. They can then use the benefit amount to pay off any potential debts you carry, fund your end-of-life services, and more.
4. I Have Enough Saved for Funeral Costs
Another common myth is that you don't need life insurance if you have a hefty enough savings plan. Keep in mind that funeral services can range between $5,000 to $10,000 on average, but end-of-life services are not the only cost to consider.
Life insurance is often used to help preserve the livelihood of loved ones after a provider is gone. Your life insurance policy may help your family hire childcare, tuition, and mortgages - all-important costs that many savings accounts won't cover.
5. I Don't Need Life Insurance If I'm Young and Healthy
Many will wait until they're older to purchase a life insurance policy, thinking they don't need one when they're young. The reality is that anything can happen anytime, making life insurance a valuable tool for all ages, not just older adults.
In fact, most young people who are beginning to build families, make significant purchases, and have life-changing moments, may find the most solace in owning a life insurance policy for worst-case scenarios.
The Bottom Line
Life insurance is one of the best financial planning tools, regardless of where you are in life. Because the insurance plans are adaptable and able to work with your needs rather than against them, life insurance isn't something you should write off because of the above common myths. Speak with a qualified professional to find the plan that works for you!
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