Life insurance should be an essential part of your overall financial plan. It can be added to your overall asset mix of home, savings, retirement accounts, and other investments to provide for your loved ones when you’re gone.
In honor of September being National Life Insurance Awareness Month, SAFE is here to help you better understand why you should obtain a life insurance policy if you don’t already have one, and re-evaluate your coverage to determine whether it is still sufficient to meet your family’s needs.
SAFE Credit Union has teamed up with myLifeApp to offer a range of whole life and term life insurance options to fit your budget and needs. Let myLifeApp do the comparison shopping for you among multiple insurance providers to select the plan that can give you peace of mind. Find a quote and connect with a life insurance expert through the myLifeApp to the find the coverage that’s right for you.
Now, let’s get to busting some myths about life insurance.
Myth #1: I’m single, and I have no dependents. There’s no reason for me to get life insurance.
Actually, there is good reason for you to have life insurance as a single person. First, every person should have enough funds to cover their funeral costs and end-of-life medical bills. You don’t want to leave your family or executor with a legacy of debt and unpaid bills. Second, purchasing a life insurance policy is a way to be remembered for your generosity. You can choose your favorite cause or charity to be the beneficiary of your death payout, helping improve the lives of others after you’re gone.
Myth #2: I’m a stay-at-home parent who doesn’t earn an income. My partner needs life insurance. I don’t.
The tasks that help your family function will still need to be done even if you suddenly pass on. Your better half may need to pay for cleaning help, a cook, or a nanny — or maybe all three! All that costs money, and that money can come from the insurance payout from a homemaker’s life insurance policy.
Myth #3: Why would I waste my money on an insurance policy when I can invest that same money and earn higher returns?
Are you sitting on millions? Unless you can honestly answer that with a “yes,” you’re better off putting your money somewhere safe with a guaranteed payout — like a life insurance policy. Investments are never 100% safe, and you don’t want to leave your dependents with an iffy source of funds.
Myth #4: Life insurance is too expensive. I can’t afford it!
There are all sorts of options available to make life insurance affordable for most people. A recent Life Happens study revealed that 80% of uninsured people who claimed life insurance was too expensive had overestimated its cost. A 20-year level term policy for a healthy 30-year-old usually falls in the ballpark of $150 a year.1 That’s peanuts compared to the benefits of having life insurance and the security of knowing your loved ones will be taken care of after you’re gone.
Myth #5: I’m too young to worry about life insurance.
Actually, there’s no better time to purchase a life insurance policy than when you’re young and healthy. The premiums are far less expensive for those under age 35, and most people in that stage of life do not have sizable assets to pass on to their dependents. Rates increase as you get older. Most importantly, dependents of the 25-year-old to 35-year-old age group may be too young to be financially independent and will need the death payouts for basic survival.
Myth #6: My children are independent adults. Why would I need life insurance?
It always feels good to provide for your children, regardless of their stage of life. Leaving your children with an inheritance that helps them purchase a home, start a business, or even put some money away for a rainy day will keep you in their thoughts long after you’re gone.
Also, you don’t want to burden your children with funeral expenses and medical bills when they’re grieving. Just the cost of a funeral and burial can top $8,000!2 It’s always best to have these expenses covered before it’s too late.
Myth #7: My job offers a life insurance policy for all employees. If I leave my job, I can always take the policy with me.
Unfortunately, this may be false. Most employer-offered life insurance policies are not portable. If you leave your job, for whatever reason, you may also be leaving your life insurance plan. No one can predict the future, and there’s no way to know you’ll remain at your current workplace forever. That’s why it’s best to purchase a separate life insurance policy, even when your employer provides you with one. Plus, buying your own policy will allow you to choose one that best suits your needs.
It’s never fun to think about what will happen after we’re gone. Taking the time to plan for end-of-life expenses, though, and leaving loved ones with enough to live on when we’ve passed, is the responsible thing to do. Don’t let a life insurance myth keep you from buying a policy!
1 Source: https://www.nerdwallet.com/blog/insurance/average-life-insurance-rates/
2 Source: https://www.lhlic.com/consumer-resources/average-funeral-cost/#:~:text=The%20average%20funeral%20costs%20between,cremation%20is%20%246%2C000%20to%20%247%2C000.