The 5 Biggest Life Insurance Myths

When you start to think about buying life insurance it’s easy to feel like the whole process is overwhelming; there are different types of coverage and there are different levels of protection that you need at different stages of life – navigating the system and figuring out what type of life insurance is right for you, or if you even need it at all, can be tough. It is important that you know that life insurance is important for every individual to have, regardless of life stage or situation. There are a lot of misconceptions about what life insurance is and what you might need, here are some answers to those common misconceptions:

1. Life Insurance is Just a Waste of My Money

You may think that putting money into a life insurance policy each month is tantamount to just throwing money away; giving it to a big company where you won’t see any financial return. Don’t be tricked into thinking this way; investing in life insurance is an important investment in the people you care about most. Life insurance will create for them a cushion to help in a complicated time and the comfort of knowing that you thought ahead to meet their needs.

2. I Don’t Need Life Insurance Because I Am Young

It seems like life insurance is the last thing you need to think about when you are young and healthy and especially if you have no dependents. Even though it seems far away, it is definitely something you need to consider now. You don’t want to leave your young family or any other dependents in a financial crisis if there is a disaster. At minimum, you should carry enough life insurance to cover the cost of your personal debts, medical bills, funeral costs and any other end-of-life care. A life insurance policy is also a great opportunity for you to leave a legacy and gift your favorite charity in the event of your death.

3. Only the Head of Household Needs Life Insurance

Don’t assume that only the highest income worker or head of your household needs to have a good, high dollar life insurance policy. Every member of your family should have at least some life insurance – even stay-at-home moms and young adult or college aged children in your family. There are a huge number of costs you don’t think about that are associated with replacing all the services a homemaker provides, that on top of end of life expenses. From childcare to cleaning and driving, it is important to be covered in the event of an untimely death.

4. I Have Sufficient Life Insurance Through my Employer

A life insurance policy that is offered by your employer might be enough to cover you and your family, but you should check out the details of the policy to make sure. For a single person or for a small family with few assets and fewer debts, an employer paid or company offered policy may be enough to cover you properly. You want to check to make sure that your life insurance policy will cover any estate taxes on top of your debts and funeral costs. On top of these basic end-of-life expenses, make sure your policy can provide enough to keep your family on their feet during a difficult time.

5. I Should Invest My Money Instead of Purchasing Life Insurance

Until the value of your property surpasses your debts (this includes any future debt that might come about through end-of-life expenses) you need life insurance coverage of some sort. Consider this; once you amass $1 million of liquid assets, you can consider discontinuing (or at least reducing) your million-dollar policy. The same goes for any amount of your assets and any amount of insurance you carry. You take a big risk when you depend on your investments only in the early years of your adult life, especially if you have dependents. If you die and you didn’t have proper coverage, there may be no way to provide for your family after the assets you hold at the time of your death are depleted.

Life insurance coverage is enormously important, it affords financial flexibility for your immediate family in a terrible time for them and it sets you up as a dependable member of your family. Do your research and consider your life insurance investment with wisdom and prudence.

This article was written by Al Boenker Insurance, a leading provider of life insurance and auto insurance in Texas. Our educated and experienced insurance agents specialize in finding our customers the lowest rate available by comparing multiple Texas auto insurance online rates as well as more than 127 individual companies around Texas.

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