The following article about the common myths and misconceptions of life insurance was written by Nicole Rubin from Insurance Liabilities. Nicole worked in the health insurance industry for a period of time and constantly found herself responding to questions about coverage and medical bills. Due to her extensive knowledge and time in the field, she decided to start a blog to help try to explain common misconceptions about life and health insurance.
4 Common Myths and Misconceptions About Life Insurance
Life insurance can be a powerful and important way to secure your family’s future. There are many misconceptions about what life insurance is and what it does. Some people think they don’t need or can’t afford life insurance—and that applies to people of all ages, shapes and sizes. Others don’t understand why financial security matters after they pass.
The truth is that life insurance affords a kind of peace of mind for people with or without families. Let’s examine a few of the most impactful myths and mistruths about life insurance.
Life Insurance Is Only For After Death
Many people think life insurance policies only cover financial situations after their passing. While this is often the most common motivation for many people taking out policies, it’s not the only purpose. Many people, especially those over 65, find that they can sell a whole life insurance policy to help cover unexpected costs that can come with aging, such as medical expenses and retirement savings losses.
Seniors Can’t Get Affordable Life Insurance
It’s not uncommon for seniors to think they are simply too old to take out an affordable life insurance policy. That myth is one of the most important to debunk. Peace of mind for those 65 and older is crucial for seniors to really enjoy the retirement they deserve.
Lincoln Heritage Funeral Advantage explains there are many different kinds of life insurance policies out there that are accessible for seniors. There are even plans that are created just for seniors regardless of their current health circumstances. Many require a health examination, which can be very cost-effective for seniors who are in good health. A nurse will usually come to your home, record your vitals and weight, and draw blood for testing.
20 Somethings Don’t Need Life Insurance
You’re young, healthy…why do you need life insurance? You have decades ahead of you. End-of-life planning is not only not necessary, but it’s also a waste of money.
If you or someone you love feels this way, here are key counterpoints: The younger you are when you purchase life insurance—term or whole—the cheaper your policy will be. In fact, CNBC says this is the ideal time to purchase a policy.
If you purchase a whole life insurance policy you can have it paid off by your 40s, which means you can pull from that money any time you need it. It also means you don’t have to pay a monthly premium for a policy at a time when you want to be focusing your finances on other important responsibilities, like paying off debt, traveling and saving.
Life Insurance Is The Only End-Of-Life Financial Decision You Need To Make
You’ve secured your life insurance policy; you can exhale now. It’s true that you can take it a bit easier—emotionally and physically—knowing that you have a plan in place. However, your life insurance policy won’t take care of everything you need for end-of-life security.
Be sure you talk to your loved ones about other important information like power of attorney, living will, dividends and investments, deeds and statements. Keep all your necessary documents and paperwork in one place so your loved ones can get quick, organized access to help with financial decisions in emergencies, sudden situations and after your passing.
Life insurance is a necessity in today’s world, no matter your age, wealth or status. And that’s why there are so many diverse policies that can fit with any lifestyle and budget—from seniors to Gen Z. Avoid falling for myths and misconceptions by taking the time to research and review the policies that are the right fit for you.
Final Thoughts
4 Common Myths & Misconceptions About Life Insurance
Wow. Thanks Nicole for such a great write up on the common myths and misconceptions about life insurance. This was incredibly helpful. It really makes you consider whether or not you should purchase a policy now or not. Although I am a big proponent of term rather than whole or universal life insurance policies, Nicole shines a light on all different kinds of life insurance. Thanks again Nicole!
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