by Carla Lopez (Guest Author) | BoomerBiz.org |
There’s a lot of mystery surrounding life insurance. Thanks to complicated rules, technicalities, and legal jargon, it’s not uncommon for people to have several misconceptions about the costs and benefits of this valuable product. These myths often prevent people from buying life insurance, leaving their loved ones unprotected. Dion Jayakoddy Retirement & Insurance outlines some of the most common myths about life insurance so you can make the best decision for you and your family.
Life Insurance is Expensive
One of the top reasons why people do not buy life insurance is because they think it's expensive. According to an Insurance Barometer Study, 80% of consumers overestimate the cost of life insurance. Not only that, but many people don’t understand all of the factors that impact the cost of life insurance. Your credit history, driving record, hobbies, occupation, and lifestyle can affect the cost of your life insurance in addition to your health and age.
In reality, many life insurance policies are very affordable. The key is to shop around and collect quotes to net the best rates.
Only Healthy People Can Get Life Insurance
Other people pass up health insurance because they think that existing health problems will disqualify them. Fortunately, you can get life insurance if you have pre-existing medical conditions. While it’s true that healthy people receive the best life insurance rates, people with health conditions can find affordable plans as well. Taking steps to manage your condition can reduce your insurance premiums. People with medical conditions can also combine policies if more than $25,000 is needed for coverage.
Because your overall health will determine the rate of your life insurance policy, you will be required to give a blood test. Despite common misconceptions, life insurance blood tests are quick and not too painful. Your blood pressure, glucose, and cholesterol levels will be checked. If these are in the healthy range, and if nicotine and tobacco aren’t present in your system, then you’re more likely to get lower premiums.
Life Insurance Can’t Be Changed
One prevailing belief out there is that once you’ve signed up for a life insurance policy it can't be changed, altered, or switched out altogether. Switching life insurance is most certainly possible, whether it’s desirable for better coverage, lower rates, or your situation or needs have changed. When changing policies, you should already have considered the important aspects of what you desire in a new policy. As with the time you signed on for your original policy, these include knowing the upfront fees, whether you want whole or term life, and determining the amount of coverage needed. Also, ensure that your new policy is active before canceling the old one, as you don’t want any lapse in coverage.
Life Insurance is Only for Parents
Many people don’t start thinking seriously about life insurance until they have children. However, life insurance can be equally beneficial for young, healthy people who don’t have any dependents. If you die unexpectedly without life insurance, you may leave your family with several large expenses that can be a massive burden for people in mourning. Life insurance will cover your debts, medical bills, and end-of-life expenses so your family won't be on the hook. In fact, as MoneySense points out, it may be in your favor to buy health insurance while you're young and healthy—you’ll secure lower premiums for your policy if you buy it now.
Only One Spouse Needs Life Insurance
Many couples think that the sole breadwinner is the only spouse that needs life insurance. However, stay-at-home parents should also consider life insurance to protect the financial health of their families. Stay-at-home parents leave behind the same overwhelming expenses as young people without dependents. On top of this, the surviving parent would have to find ways to replace the duties of the stay-at-home parent, like hiring a nanny for childcare. Life insurance can also help your spouse afford to take some time off work to grieve.
Employer-Provided Insurance is Enough
Finally, many people forgo life insurance because they believe that their employer-provided coverage is enough. This insurance can be convenient, but it often doesn’t provide the best protection. Most of these employer-provided plans will pay about two times your annual salary. This is significantly less than experts recommend—about 7 to 10 times your salary. Additionally, your life insurance will end when you leave your job. This can be problematic if your health declines in the future and you’re unable to get an affordable policy after leaving the company.
Getting life insurance is a big decision that should not be clouded by misconceptions. Take the time to learn about your options and determine what's available to you, then reach out to life insurance agent Dion Jayakoddy to get all the details lined up. With a little digging, you're bound to find an affordable policy that provides the level of coverage that will give you peace of mind.
Dion Jayakoddy Retirement & Insurance provides personalized service at a very satisfactory level, as well as affordable coverage that simplify today’s overwhelming insurance market. Contact us today for more info by calling (408) 390-5079!
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About the Author: Carla Lopez
Carla Lopez retired a couple of years ago, but she didn’t lose her entrepreneurial spirit. She created Boomer Biz for retirees like herself who still have a desire to work and achieve. The site is a resource for people in their golden years who want to start their own business or go back to work doing what they love.