3 Common Life Insurance Myths that Can Guide You in the Wrong Direction

Most people don’t feel very comfortable when it comes to buying life insurance simply because this product reminds them that they are not immortal. Even so, individuals who have to support one or more family members usually want to make sure that their loved ones could live a comfortable, stress-free life even in their absence. For this category of prospects, life insurance is the best preventive measure that they could invest in, since it offers the promise of a financially stable future for all their beloved relatives.

Does this mean that all life insurance policies are identical and come with the same kind of benefits? Of course not! Potential buyers can customize their policy as they see fit, based on their real necessities, expectations and financial possibilities. Purchasing life insurance is definitely not a simple assignment, since there are various elements that should be factored in by customers before making a final decision. Also, lack of information often leads to counterproductive speculations that may influence your purchase in a negative manner. To minimize risks and walk away with an excellent, decently priced policy start by analyzing the 3 common life insurance myths listed below.

1)      My General State of Health Is Not Important

This is one of the most dangerous myths that you should never take into consideration. Insurers strive to attract perfectly healthy candidates who are less likely to pass away before their time, so how could you possibly imagine that insurance companies do not care about your health? Of course, there are those guaranteed-issue, low-cost life insurance policies that do not require a medical exam and offer you the guarantee that you won’t be rejected, regardless of your current general state of health. You may be wondering what’s wrong with this type of policies.

For the first 2 years, a period representing the contestability window of the insurance company, they trigger minimal death benefits. At the end of the contestability timeframe, monetary benefits can reach a higher value, but these are definitely not as satisfying as the ones associated with big policies allowing relatives to embrace a luxurious lifestyle. On the contrary, they are similar to burial-type coverage, so basically they cover funeral expenses and do not offer considerable financial support in the long run.

On the other hand, certain carriers are specialized in high-risk categories. This means that they are willing to insure people with certain serious health problems. Nonetheless, usually these policies never come cheap. To get more details on this topic, discuss your options with your insurer. Remember that you should always come clean about potential health concerns. Otherwise, the lies written in your application could invalidate your claim.

2)      I Don’t Need to Spend Money on Life Insurance Because My Employer Has Everything Covered

Many people don’t want to spend any money out of their own pockets simply because their employer offers them a life insurance policy. Even in this particular situation, a separate policy would also come in handy because the ones offered by different businesses are temporary. The coverage ends when the employee decides to leave the company. Moreover, there is one more thing that you should take into consideration: policies paid by one’s employer offer a modest coverage equal to the annual salary of the beneficiary. In most cases, this is not enough, especially when the staff member has one or more family members who depend on his/her monthly income to make ends meet.

To decide what kind of coverage would make more sense to you and how much you could actually afford to spend on a separate policy, you can count on Insurance Quote Depot to compare life insurance rates by zip code. Also, you can use several types of online calculators available online, to identify the type of policy that may work best for you and your family.

3)      Life Insurance Is Just Too Expensive

When you are supporting a big family, you want to do everything in your power to reduce expenses. People who are already struggling to get by are often tempted to consider life insurance a luxury that they cannot afford.

Recent studies indicate that more than 95 million Americans do not have life insurance. Moreover, according to a survey conducted by LIMRA, and LIFE, 85% of the respondents affirmed that life insurance is too pricy. In reality, this is a huge myth that can cloud your judgment and make you pass up once-in-a-lifetime opportunities. Insurance experts tell us that the basic term insurance rates have come down by approximately 16% over the past 16 years. Undoubtedly, this is a good moment to purchase a decently priced life insurance policy.

For instance, a 40-year old beneficiary who is perfectly healthy and does not smoke can get his hands on life coverage worth ½ million dollars by paying one dollar per day (approximately 31 dollars on a monthly basis), while being given  the guarantee that his premiums won’t be altered for 2 decades. This example illustrates the fact that life insurance is a necessity and definitely not a luxury. You can forego that daily coffee and muffin which cost you at least 5 dollars on a daily basis and invest this negligible amount of money in an excellent policy that would secure the future of your loved ones and allow them to cope with unpredicted expenses triggered by your unexpected death.

Bottom Line: Life insurance is definitely not as expensive as most potential buyers would be inclined to think. To make an inspired choice, start by monitoring your daily expenses. Set your priorities straight, compare life insurance rates by zip code and discuss your options with friends and family members who know more than a thing or two about life insurance policies. Don’t let these common life insurance myths fool you; when something about a certain type of policy sounds too good to be true, this doesn’t necessarily mean that it isn’t. It just means that you have to do extensive research before deciding to sign on the dotted line. When in doubt, don’t hesitate to consult a lawyer or an experienced insurance agent, to be able to pick the best type of coverage.