Growing up, I would look through the newspaper to find the sports section, the funnies, and any other interesting articles I could find. However, I always seemed to come across the obituaries. I would stop and read them. Most people seemed to live a great life: loving families, great jobs, and lots of extracurricular activities. But, the thing that affected me the most was when at the end of the obituary, it would state something along the lines of, “in lieu of flowers please send money.” Today it looks a little different. There are no more newspaper obituaries, but instead online and social media declarations and announcements. Yet, one thing looks the same; instead of “in lieu of…” it now states “gofundme” or tells where an account has been set up at a local bank. The wording is different, but the intent is the same! That is why I strongly believe we need to address the topic of Life Insurance Myths and Misconception.
Life insurance is too expensive.
“86% of Americans say they haven’t bought life insurance because it’s “too expensive,” yet they overestimate its true cost by more than 2X”. * Believe it or not it’s not as expensive as you think. It could be half as much as you think.
Life insurance through my employer is enough.
“33% of Americans say they don’t have enough life insurance, including one-fourth who already own a policy”.* Some employers provide some life insurance for their employees; however, they normally offer 1 to 2 times your annual salary. Most likely that number doesn’t include commissions, bonuses, and other income. It is recommended that you have 8-12 times the annual income in life insurance coverage. (You may want to use a calculator to determine specific need.) Also, if you ever change jobs, get terminated, or retire, in most cases your life insurance coverage will not go with you. Depending on age and health, it could be less expensive to purchase and own your own policy. “Those with life insurance carry enough to replace their income for just 3.6 years. How would their families get by after that?”*
Stay-at-home parents don’t need it.
“Imagine if something were to happen to the stay-at-home spouse in your family. The breadwinner may need to hire someone to clean and take care of the kids, and that can cost a lot of money. Unless your family would have that extra income to spare, you may need life insurance on both spouses,” advises Marvin Feldman, President and CEO of life insurance non-profit organization, Life Happens. This also gives the remaining parent time to grieve, take care of kids, and take time off of work.
I’m too old or too young for life insurance.
Life insurance provides for the needs of those left behind. There are lots of different options for coverage no matter what stage of life you are in. And, as long as there is a need there should be coverage in place. Depending on age and health, different companies will provide different options. Work with a professional to help you cover that need.
“85% of Americans say most people need life insurance, yet only 62% have coverage.”* In fact, “3% say their cell phone is the most important, and 20% have cell phone insurance.”* Every person’s situation is unique and different. Some need a lot of coverage and some may not need any at all. But what I do know is that families need to be informed and educated on their options. Each person needs a plan…and “gofundme” isn’t a plan.
*LIMRA and LIFE Foundation 2013 Insurance Barometer Study (www.lifehappens.org)