Common Life Insurance Myths and Why You Should Ignore Them

Most common life insurance myths:

1. Life insurance is expensive

2. Life insurance is complicated and slow to get

3. You need to go through a medical exam to get life insurance

4. You cant get insured if you have a pre-existing medical condition

5. Life insurance is only for married people with kids or people with dependents

6. You don't need life insurance if you are a stay-at-home parent with no income

7. You dont need private life insurance if you already have one through work

8. You don't need life insurance if you are young

9. You can't get covered if you are "too old"

10. Life insurance isn't a good investment

Myth #1: Life insurance is expensive Here's the thing - life insurance doesn't cost as much as you might think. It costs less than $100 per month. If you compare prices across different carriers, you'll see that the average rate is around 2% of your annual salary. This means that if you earn $50K annually, you could pay up to $500 each year just to get the peace of mind of a life insurance policy. Now, obviously, not everyone needs such high levels of coverage. For example, someone earning $25K would probably be fine paying $250 per year. However, anyone making over $75K should definitely consider getting additional coverage. After all, if something were to happen to them, their family wouldn't be able to afford to live comfortably.

Myth #2: Life insurance is complicated and slow to get

Unlike things you buy and pay for in monthly installments, life insurance is something that you purchase and hope to never use. And yet, it can offer a lot of peace. Life insurance is not difficult to understand, but there are certain terms and conditions that must be met before an application will be accepted. Life insurance offers a death benefit to your loved ones in case you die. The cost of the death benefit comes in the form of a monthly premium, and the specific amount of the premium depends on many factors (type of life insurance, your age, health, location, and more). As long as you pay the monthly premiums and your policy term is valid, your loved ones will receive a death benefit payout from the insurance company in the event of your death. While many traditional types of life insurance require a medical exam or access to your medical records, there are "no exam life insurance policies" that can give you coverage in just a few minutes.

Myth #3: You need to go through a medical exam to get life insuranceYou can buy life insurance with no medical exam. This is called no-medical or direct application and it's the fastest way to apply for life insurance, but you have to be careful because not all companies offer this option. If your health isn't perfect, you may want to wait until after an annual physical before applying. As part of the application process, many life insurance policies require you to take a medical exam. In order for the insurance company to calculate your life insurance premium and rate, they need to know about your health and medical history. The good news is that there are life insurance policies that will allow you to skip the medical if you don't want to be poked and prodded by a stranger, or if you just don't have time.

Myth #4: You cant get insured if you have a pre-existing medical condition You can, but it might be more expensive because you may be viewed as a higher risk by the insurance companies so it's possible that the number of providers willing to cover you will be limited. Everyone who applies for life insurance is assessed on a case-by-case basis, so it's really up to your particular circumstances. Some pre-existing conditions might not affect how much you pay for life insurance, but more serious conditions like heart disease or cancer can make it difficult to get a competitive price. It is important to let your provider know if you have a pre-existing medical condition so they can weigh up your risk and chances of claiming. This will help them decide how much to charge for insurance, or if they'll offer you a policy at all.

Myth #5: Life insurance is only for married people with kids or people with dependents It is clear how the death benefit will be used when people are married with children. The money will be used to support their household, helping them transition to life without them. It is not the same when you are single. There are a lot of reasons why you might buy life insurance if you are single, and you can use your single life policy death benefit in many different ways such as:

1. Funeral costs: even if you dont care much about what happens after you die, the odds are high that your loved ones will probably want to have some sort of funeral or remembrance service).

2. Private student loans: when you die, federal student loans will usually be discharged, but private loans may not.

3. Credit card debt: it is possible for your family to get stuck with your credit card balances after you pass away.

4. Future health issues: you might want to buy life insurance now if you know that you have a family history of chronic conditions and may be affected later in life - the younger you are, the cheaper your premiums will be.

Myth #6: You don't need life insurance if you are a stay-at-home parent with no income Life insurance is necessary for anyone who contributes to the home in a way that makes a financial impact or whose loss would add a financial burden to the surviving members of the household. If your spouse is the primary breadwinner, then they will be responsible to pay off any debts that may have been incurred during their marriage. If this happens and they die before paying them off, it can cause financial problems for the surviving partner so you want to make sure they will be taken care of. Even if they don't earn income, stay-at-home parents should have life insurance coverage too - child care provided by a stay-at-home parent would have to be paid for by the surviving parent and a life insurance payment could allow the remaining parent to take a few years off work.

Myth #7: You dont need private life insurance if you already have one through work Spouses who work outside of the home often rely upon other sources of income such as Social Security Disability Insurance payments, retirement savings accounts, pensions, annuities, investments, etc. These types of assets could potentially be affected by the loss of income resulting from a serious health problem or premature death of a spouse. If this is the case for you and your spouse or domestic partner, it may be time to consider whether your current level of protection is adequate because when one spouse or parent becomes ill or dies, there will likely be some change in how much money is available to pay bills, buy groceries, etc. Basic employer-sponsored life insurance is usually low-cost or free, but your policy's face value most likely isn't high enough. It is likely that you need coverage worth at least six times your annual salary for dependents who rely on your income (some people recommend 10-12 times your income).

Myth #8: You don't need life insurance if you are young There is no fixed age to take out a life insurance policy. For a lot of people, the age at which they buy their first home is the point at which they take out life insurance because if you want to purchase a property, most mortgage lenders will require you to have life insurance. If you have a partner or family member who depends on your income, life insurance is also a good idea because the loss of your income can put them in a difficult financial situation. Remember, life insurance is there to protect your loved ones - if you pass away unexpectedly, life insurance can help pay off your debts. Life insurance is a good idea if you have a mortgage or dependents because accidents do happen.

Myth #9: You can't get covered if you are "too old" While getting a life insurance policy as a senior is harder, it isn't impossible, even if you suffer from health issues. Whether you want to leave a lump sum for your family or cover final expenses, there are many life insurance coverage options that cater to seniors. But it's important to check to make sure you do need life insurance. You might not need coverage if you don't have any debt and have savings or funds for final expenses. And in case you do need coverage, if you are in good health for your age and willing to take a medical exam, a term life insurance policy may be a good option, since it can be used to cover debts, such as a mortgage, or provide financial support for a spouse or dependent if you die during the policy term.

Myth #10: Life insurance isn't a good investment The answer to this question depends on how you define "investment." If by investment, we mean the purchase of something that will increase in value over time and provide income for your heirs, then life insurance is not an appropriate investment. However, if you are looking at it from another perspective, such as purchasing assets with cash flow or liquidity, then life insurance can be considered an excellent investment vehicle. When insurance companies make excess profits after their projected operating costs and claims have been covered, they pay dividends to the policyholders of whole life insurance policies. This isn't an investment but it is another way that whole life insurance policies pay off. Whole life insurance has a cash value component that is tax-deductible. This cash value is an important part of the policy because you can use it to pay for a house, college, business expansion, or supplement your retirement income - and it is tax-free if you don't withdraw more than you put in.