WEDNESDAY, APRIL 19, 2023
With so many insurance providers offering a wide variety of life insurance policies, it’s no surprise that rumors spread. Many people think life insurance is too expensive or that its coverage is too limited. The best way to bust all of the myths is to talk to an agent who can walk you through the policies that meet your needs; but in the meantime, here are three busted myths about life insurance that may help you when it comes time for making coverage decisions.
Myth #1: Empty nesters don’t need life insurance.
Some people view life insurance as unnecessary after their kids graduate from college and the house is finally paid off. However, you still have to think about your spouse, retirement and any other debts you may have. What would happen if you died next week? Would your spouse have enough saved up for retirement to maintain financial stability for the next 20 to 30 years? In many cases, this is not a reality. Purchasing life insurance is a means to financially protect your spouse throughout retirement if you die.
Myth #2: Your life insurance policy should equal twice your annual earnings.
Your life insurance needs depend on your circumstances and should not be dictated by some rule you heard from a friend of a friend. For instance, if you’re married with no children and very little debt, a smaller insurance policy may suffice, especially if your spouse works full-time. However, if you have children, outstanding debt such as a mortgage and/or excessive medical expenses, you may want to look into a larger policy. This is especially true if you’re the primary wage earner. Think about what you want to plan for; do you want your policy to support your family for a year while they figure out the next step or do you want to support them for many years to come? Your agent can help determine the right policy size for you.
Myth #3: You have enough life insurance through work.
Employer-sponsored group life insurance should be considered a helpful perk rather than your main plan. Such coverage is often limited to only one or two times your annual earnings, which may not be enough to cover your family if your needs are greater. If you’re the primary wage earner, this coverage can keep your family afloat for one to three years (depending on their spending habits), but you should look into additional coverage if you want to ensure more financial protection for them in your absence. Ask your agent about a life insurance policy to supplement your existing work plan.
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