5 Common Myths About Life Insurance Benefits

Get the Truth About Life Insurance Coverage

Life Insurance Benefits

For quite a few people, paying for life insurance on a monthly basis just does not make sense when they could use the money to pay for bills or other items upfront. According to a 2015 study from LIMRA, 61 percent of consumers said that paying their mortgage, grocery bill or monthly rent was their top financial priority. We will discuss five common myths about life insurance and debunk them here.

Myth #1 - Life Insurance Policies Are the Same Across the Board

The first myth about life insurance that has become quite common is that all of the policies are the same.

This cannot be further from the truth. There are several types of life insurance policies available today; but the most common offered are whole life and term life. Whole life is just that; the policy lasts your entire life and expires when you die. Term life lasts for a set term, or amount of time, typically 30 years or so. Some people choose term life, while others prefer whole life. Then, there are some people who have a combination of both policies to protect themselves and their loved ones.

Myth #2 - Group Life Insurance Offered by an Employer is Enough

The second myth we will debunk today is that life insurance solely from an employer is enough. This is a myth because it all depends on each individual’s situation. Some people are comfortable with the life insurance provided by an employer. Others feel they need a little more protection for themselves and their loved ones so they purchase an additional supplemental policy or two on their own.

Those who only have life insurance through their employer tend to go this route because it is paid for by the employer and there are no out-of-pocket expenses for the employee.

Myth #3 - Qualifying for Life Insurance is Difficult

Many people believe that qualifying for life insurance is difficult, especially those who have to purchase it on their own.

There are some policies out there that require lab tests, blood work and a physical prior to the policy being activated. But, not every life insurance policy requires this amount of work prior to activation. You can obtain a life insurance policy online or through the mail without jumping through all of these hoops. You will simply need to provide a tiny bit of health information prior to activation.

Myth #4 - Ignore the Policy Once It’s Purchased

Another common myth about life insurance is that it is alright to ignore the policy once it has been purchased. If you follow this myth, you are putting yourself at a disadvantage. You will want to review your life insurance policy at least every couple of years to make sure it is enough coverage based on your financial situation. You should also revisit the policy if a major life change has occurred. Major life changes include unemployment, divorce, death of a spouse or birth of a child.

Myth #5 - Life Insurance is Just too Expensive

Possibly one of the most common myths about life insurance, and biggest excuses given by those who do not have coverage, is that life insurance is expensive. There are different levels of premiums available for policies, but the bottom line is that the younger you are when you secure the policy, the more affordable the premium will be throughout the life of the coverage.

Now, term life insurance is a more affordable option, but the premiums will increase at various intervals throughout the life of the policy. You will pay more for whole life insurance, but the premiums will not change during the life of the policy.

As you can see, the five myths about life insurance debunked above are quite common. In fact, they actually make sense before reading all the facts. But, they are definitely myths.

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