There are plenty of life insurance myths floating around, especially when it comes to a topic that often feels taboo or impolite to discuss. That’s why we’ll dive into all the life insurance myths and facts you should know because you and your family deserve to benefit from the protection and coverage of life insurance—if it’s what you want.
Keep reading to find out the life insurance facts you’ve been searching for, so you can make an informed choice.
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Myth: I don’t need to purchase life insurance until I’m older
Fact: This might be one of the biggest life insurance myths out there, and one we want to nip in the bud right away. The best time to purchase life insurance is when you’re young and healthy. You’ll lock in lower rates, especially if you develop health issues later in life.
If you’re a parent, life insurance will also help protect your children during the years they’re most dependent on you. Another reason to buy young is that if you choose permanent life insurance, you’ll benefit from years of extra compound interest on your cash-value account.
Myth: Life insurance is too expensive
Fact: While your premiums will depend on a variety of factors like health, age, and type of insurance, life insurance is often much more affordable than people think, especially if you purchase it when you’re young and healthy. Term life insurance is typically the most cost-effective option if you’re looking for basic coverage to protect your loved ones, and it can be as low as a few dollars a month. Comparing quotes from multiple providers will also help you find the best rate.
Myth: I won’t be able to use my life insurance during my lifetime
Fact: While the goal of life insurance is usually to ensure your loved ones are free from financial stress if you pass away, it can be frustrating to pay into a policy for years and see no tangible benefit. If that’s the case, you might want to explore whole life insurance; your beneficiaries get a guaranteed death benefit no matter how long you live, but the policy also comes with a cash value component. Part of your premiums gets funneled into an investment account that you can borrow against during your lifetimes, such as for a first home purchase, college education, and more.
Myth: I should invest my money instead of purchasing life insurance
Fact: Investments go through ups and downs, but with whole life insurance, you earn a fixed rate of interest on your cash-value account. This is a great option for those who don’t want to gamble with their savings, but still want to earn higher interest. Plus, life insurance is more affordable than many people realize, so you may just be able to invest and purchase life insurance.
Myth: I don’t have an income to replace so I don’t need life insurance
Fact: While it’s true that one of the main reasons people buy life insurance is to help replace the lost income of the deceased, it’s not the only reason. A life insurance benefit can help pay for end-of-life costs, including funeral and medical bills, and provide the family members financial relief in a time of grieving. Plus, if you’re the primary caregiver for your children, you still contribute financially to the household by saving thousands a month on childcare, even though you’re not technically earning an income.
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You should carefully consider whether life insurance is right for you, and that means knowing the facts. Wading through life insurance myths can be tough, but it’s often well worth it to find the coverage you deserve to help protect your loved ones.
Lauren Lewthwaite Lauren Lewthwaite has been freelance writing for almost five years writing content that ranges from health to insurance and everything in between. Lauren is also a trained translator in French and English and is a dog-mom to an adorable Australian Shepherd.
