Term life insurance is the most common type of life insurance. People that don’t have a lot to invest in a whole life policy often turn to this type of life insurance.
Unfortunately, it is fraught with many myths that people believe, keeping them from getting the coverage they need. Before you believe these myths, allowing them to ruin your financial life, read on. We’ll tell you the truth about the myths and what you can do to get the life insurance you need.
Myth: The young and healthy do not need term life insurance.
Truth: You are better off getting term life insurance when you are young and healthy – it will cost less! The older you are, the closer you are to death. The same is true if you are not ‘healthy.’ Even small health issues can affect the cost of your life insurance as it shortens your life expectancy, even if just a little.
The earlier you buy your term life insurance, the lower premiums you will pay. Luckily, those premiums remain the same as you age. However, if you were to wait until you were older, you would pay a higher premium for the same coverage you could have already had.
Even if it’s just $20 more a month, that could cost a total of $2,400 on a 10-year term and $4,800 on a 20-year term.
If you are young and/or healthy, you don’t need term life insurance
Myth: If you are sick, you cannot get term life insurance.
Truth: Many insurance companies still offer term life insurance for less than healthy applicants, it just costs more money. If you didn’t secure a policy before you got sick, consider one right away. The less time you let pass, the lower the premium will be. Of course, it depends on the extent of your illness and the prognosis provided by the doctor.
Keep in mind, though, there are certain illnesses that could render you ineligible for life insurance. Again, the earlier you secure a policy, the better off you’ll be in the end.Get today’s insurance rates.
Myth: You don’t need a separate policy if you have life insurance through your employer.
Truth: There are several things wrong with relying on your employer-provided policy. First, you have no guarantee how long you will remain at the same job. Once you leave, you lose the policy. At this point, you are older and an individual policy could cost you more than if you bought it earlier.
Second, group life insurance policies usually don’t provide enough coverage. You have to compare what’s being offered with what you need. Most employers provide coverage that is equal to no more than 2 times your salary. If you have kids and a spouse, that won’t be enough to support them. You’ll need at least 5 times your annual salary for them to live comfortably for a while.
Last, group life insurance is often more expensive than an individual policy. Again, you won’t know unless you shop around. However, many group policies increase each year. Before you know it, you are paying much more than you would have for an individual policy and for less coverage.
At the very least, you should supplement the group policy with your own policy so that you have all of your bases covered.Shop and compare insurance quotes.
Myth: If you don’t work, you don’t need life insurance.
Truth: Yes, the main idea behind life insurance is to cover lost income in the event that you lose someone. But, just because a family member does not work, does not mean they do not provide value to the home. If a family member that doesn’t work passes on, there is work that needs to be done in their absence. Were they the children’s caretaker? Did they clean the home or do the cooking? The person that is left behind must take care of these things, plus work, if they are the breadwinner.
It costs money to replace these services. Maybe you’ll have to pay for childcare services now or a housekeeper. You could experience financial strain as a result of the loss and should consider even a small amount of coverage for family members that do not work.
Myth: Your lifestyle doesn’t affect your life insurance premiums.
Truth: Life insurance companies look at more than your age and health. They also look at your lifestyle habits. If you smoke or drink a lot, it could affect your premiums. These habits put you at higher risk for a shorter life expectancy. They can both cause serious health issues, which then put you at risk for an early death. They both also put you at risk for spontaneous death. If you choose not to change your habits, you could pay much more for life insurance.
Term life insurance can protect you in the event of a loved one’s passing. Consider finding a policy that fits your financial means so that you have the protection you need should a disaster occur.Get the right insurance coverage.