Life Insurance Myths

Among the many types of insurance, life insurance is often the most mysterious to consumers, giving birth to myths and misunderstandings. Part of the reason life insurance isn’t always well understood is that the topic isn’t much fun. Most of us can think of a million things we’d instead consider than life insurance. Fortunately, life insurance usually isn’t too difficult to understand — but there are a few myths that you should address.

Term life insurance is all I need

Term life insurance certainly has its place, particularly for financial obligations with a shelf life, like a loan. What many households find, however, is that the need for life insurance is ongoing. When an existing term policy reaches the end of its term, they wish there was an affordable way to continue coverage. Complimenting a term policy with a whole life policy may be an option — or maybe a customized solution is in order. Rather than take any chances, contact your broker to discuss your unique needs.

I can renew my term policy if I still need insurance.

Term life insurance is an attractive option for many households because it’s affordable. In many cases, it’s easy to fit the policy cost into the household budget, particularly for younger families. Term life insurance doesn’t last forever, though. Purchasing another term policy when you’re a couple of decades older can be much more expensive than the original policy. If your health has changed, getting coverage through many insurers may be difficult or impossible. Discuss your options with your broker, considering both long-term and short-term needs.

Only the breadwinner needs life insurance coverage.

While life insurance can help support a family by providing income replacement if a loved one passes unexpectedly, viewing life insurance only as income replacement can leave risky coverage gaps. Stay-at-home parents bring a wealth of valuable services to the family that would be more costly than you might think if you suddenly had to pay for them all out of pocket. Consider the cost of daycare, housekeeping, tutoring, and a chauffeur service — just a few of the services performed by stay-at-home parents every day and often seven days per week.

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