Life insurance. It isn’t the most fun thing to think about, and with inflation on the rise and people cutting back on spending, it may seem like this is a place to trim expenses. This is especially true if you are under the impression that life insurance isn’t important for you.
At Superior Insurance and Auto Tags, we’ve heard all of the myths and misconceptions out there about life insurance, and have put together this list to set the record straight. Here, we’ll debunk four of the most common life insurance myths so you can be sure you are making decisions based on the most accurate information.
Myth #1: Life insurance costs a fortune.
Are you under the impression that you cannot afford life insurance? Odds are good that you are overestimating the cost. According to a LIMRA study, the cost of life insurance is the number one reason Americans opt not to get it, however, over 50% of consumers have an inaccurate view of the expense, believing life insurance will cost up to 3 times more than it actually will.
Realistically, a round of mini golf or an evening out at the movies costs more than the month-to-month premium for a typical insurance policy for a healthy person who is 30 years old.
One other thing to keep in mind is that premium costs do rise as you get older. If you don’t delay getting coverage, however, you can lock in those lower rates now and save substantially over time.
Myth #2: I don’t need life insurance because I’m single.
Many people think of life insurance as a protection for their spouse and children – and it is. But the bottom line is that even if you are single and don’t have kids, you may still have other people depending on you, and unless you are in a very small minority, you probably have some kind of debt. This means that, in the event of your passing, your student loans, credit card debt, or other obligations can reduce the amount of money you would otherwise be able to pass on to your loved ones.
Beyond that, other reasons to get life insurance now rather than postponing until you start a family include taking advantage of lower rates when you are younger, and locking in coverage before any significant health condition becomes a factor later.
Myth #3: I’m pregnant, so I won’t get approved for life insurance.
It is true that, if you are experiencing complications in your pregnancy an insurer may postpone coverage until after you give birth so they can get a better picture of your health status. Generally speaking, however, pregnancy should not be an obstacle to obtaining life insurance, and you should be able to work with a trusted agent to find the best policy for you. A lot of providers will even use your pre-pregnancy weight to calculate an estimate in order for you to receive a lower rate.
Myth #4: After taxes, my family won’t get much from my life insurance policy, so it’s not worth it.
The payout of a death benefit on your policy is not considered inheritance and generally speaking, you don’t have to report it as gross income. You do, however, have to report interest, so it’s important that you consult with professionals to get accurate guidance about any benefits received.
For the most part, however, whole life and term life policies alike have beneficial tax breaks.
Have more questions about life insurance? Give the professionals at Superior Insurance and Auto Tags a call right away and tell us how we can help!