September is Life Insurance Awareness Month, and the reality is most people don’t know the facts when it comes to this important piece of financial protection. What are the misconceptions and the real truths?
I’m Covered Through My Company’s Policy
Myth: I’m covered through my company’s policy.
Fact: The problem with most employer’s life insurance is that it only covers you while you are employed at the company and is often very basic coverage that won’t provide much more than the bare minimum. The truth is most people need secondary coverage.
I’m 22 Years Old, Healthy, and Have Years Before I Have to Worry About Illness or Death
Myth: I’m 22 years old, healthy, and have years before I have to worry about illness or death.
Fact: You can get sick and die at any age. Life insurance is financial protection at all ages. Plus, it protects your family from taking on any debts you leave behind, like student loans, for example. It’s also generally less expensive the younger you are, so it makes sense to lock in protection at a good price.
I’m Sure I Have Enough Coverage
Myth: I’m sure I have enough coverage.
Fact: The truth is most people don’t have enough life insurance coverage. You should aim to secure about ten times the amount of your salary. Life insurance is meant to help pay for funeral costs, contribute to mortgages, supplement your spouse’s income, pay for your child’s education, and much more.
I Won’t Qualify Because I’m Too Old or Have a Pre-Existing Medical Condition
Myth: I won’t qualify because I’m too old or have a pre-existing medical condition.
Fact: You can absolutely get life insurance as you age, even if you have certain medical conditions. In fact, policies are written for people with obesity issues, high blood pressure, and even HIV. Start with your employer because although the coverage may not be significant, you may automatically qualify. After that, shop around.
I Got Life Insurance 10 Years Ago, So I’m Good To Go
Myth: I got life insurance ten years ago, so I’m good to go.
Fact: It depends. What did your life look like ten years ago compared to now? Did you get married? Have kids? Bought a home? You should revisit your policy annually to make sure it’s up to date and can fill the financial gaps if you should pass unexpectedly.
Life Insurance Is Important
Tom Mathews, a Certified Financial Educator and author of the book “How Money Works,” says, “Life insurance is so important because although you might not be able to fully protect yourself from illness or accidents, you can protect your income and your wealth. Life insurance is a defensive strategy motivated by a sense of love and responsibility. Proper protection of your income is significant because without your ability to provide for your family or your business, the stability they enjoy today could become hardship they can’t overcome tomorrow.”
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