“Buy term & invest the rest.”
This is a common phrase we hear when it comes to life insurance. The truth is that while term life insurance makes sense for some with short term coverage needs, there are many situations where permanent life long coverage makes better sense. Permanent or whole life insurance is a great way to cover final expenses and estate taxes. A term policy may protect against a loss within a set time frame/term but is quite useless if a client outlives the term.
“Life insurance through work is all you need”
This is a common misconception. Generally speaking, employer provided group life insurance is designed to cover 1 to 2 times your salary, excluding commissions and bonuses. In reality this is not enough coverage. Many experts recommend a minimum of 5 to 8 times your annual income in life insurance to adequately replace your income for the dependents you leave behind.
But for arguments sake, lets assume that you have a magical employer who does provide adequate life insurance in the 5 to 8 times your salary range, remember that employer provided group coverage is usually only in force while you are an employee. Even in a situation where you may be able to convert it to an individual policy at retirement, the cost would still be astronomical when compared to purchasing an individual life insurance policy today, especially if your health gets worse with age.
“Only the family breadwinner needs life insurance”
This is a common belief as well. In some cases when a breadwinner earns enough it may not be an issue to purchase life insurance just for the breadwinner. However, consider a situation where a breadwinner relies on the free home cleaning, laundry service, and childcare provided by the stay at home parent. If the family was to lose the stay at home parent, the cost to replace these services may be too much to handle, especially as they mourn the loss of this parent. A life insurance policy on a stay at home parent would help alleviate the cost to replace the task performed by the stay at home parent as well as allowing the breadwinner to take some time off work to mourn the loss of their loved one.
“I’m too young to think about life insurance”
The truth is that life insurance actually makes the most sense when you are young. You are at your healthiest and the premiums are the cheapest. The longer you wait, the more expensive it will become. The older you get, the more likely you are to develop a health condition that may make it prohibitively expensive, or even impossible to get. Sadly, many people do not look into life insurance until they actually need it, and by then in many cases, it’s too late.
“It’s better to buy online”
In reality, the true cost of life insurance is the same whether you purchase online or with a human agent. The important difference to note is that an actual agent can provide the personal service required to figure out your true life insurance needs. A review and analysis with an agent would reveal needs that an online program would not. An online quote does not know if your real needs are long term or short term, it simply spits out a quote based on what you, the client believes you need and the information you have provided. Additionally, a motivated agent can help motivate you to actually get the policy you need rather than procrastinate until it is too late.
Do you have questions about your individual or estate life insurance and financial needs? Reach out to me directly and I will be happy to guide you through the process of choosing the right insurance and financial products for your unique needs.