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Life Insurance Common Misconceptions

Many people delay, or even neglect the importance of getting a life insurance because of several false beliefs. Here are some of them.

I am single and I do not need Life Insurance

It is true that the most important determinant as to whether you need life insurance is if you have dependents who are likely to struggle financially if you were gone. However, being single doesn’t necessarily mean that someone else won’t be needing your help. You may have an aging parent who will need financial assistance, or a certain charity close to your heart. 

I already have insurance at work

While it’s great to have life insurance at work, it might not be sufficient especially if you have a spouse or children. Furthermore, some of these employer-arranged insurances might only be temporary and should cease once you stopped working for that company.

Life insurance is expensive

This is not necessarily true. Although some life insurances can be costly, there are some which you can easily afford, such as term life insurances. They are relatively cheaper, and depending on your specific needs, they may be enough to provide the coverage that you’re looking for.

I’d rather invest than buy life insurance

A common mistake buyers do is comparing life insurance with investment. Although permanent life insurances offer features similar to investment, life insurance is insurance. Whatever type it may be or whatever name it might be called, life insurance is designed to become protection, not an investment portal. It’s even worse dismissing the need for life insurance and opting to invest instead, as relying entirely on investments could be risky.

Term life is better than permanent life insurance

While term life is certainly cheaper, there are other features in a permanent life insurance that a term life lacks. The two policies are different in a number of ways, and it would be difficult to judge which one is better. After all, it always comes down to your special needs and situation in order to determine which option best fits you.

I am young and healthy so I don’t need life insurance

A lot of people tend to ignore the importance of life insurance while they are young and in their perfect state of health. In doing this, you might pass on the chance of getting cheaper premiums while you are young and healthy. Having to wait until you grow older and have accumulated large debts will make it more difficult, and more expensive to obtain life insurance.

I am a stay-at-home spouse so I don’t need life insurance

Oftentimes, people do not realize the financial contributions of a homemaker. Although this person doesn’t bring home a paycheck, the services provided by a stay-at-home spouse- from household chores to child-rearing- could cost a fortune if performed by someone else. The loss of a stay-at-home partner could in fact produce as much damage as it could to the family’s finances as much as it does to the emotions, so securing an insurance policy for one’s spouse could actually be a worthwhile undertaking.

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