Preparing for the future usually means saving for your children’s education or for retirement. You may not have considered life insurance because of misconceptions about costs or other issues. Instead of letting false information sway your purchase of this important life planning tool, take a moment to get the facts.
Life insurance and you – what are the facts?
Life insurance is set up to provide financial support to the people you love should you suddenly pass away. Some policies build up value over time and over the years, and can be borrowed against, covering a policyholder for a lifetime. Life insurance policies vary in how they work, how much they cost, how benefits they pay and when benefits are paid. Check out the common misconceptions you may have heard about life insurance so you can make an informed decision.
Misconception: Life insurance only pays out on death.
People have a longer life expectancy than before. Living well into the 80s and 90s is now a real possibility. Life insurance can make it possible to live a financially independent life. Your life insurance policy is a valuable asset that you can borrow against to help you through your golden years. Some policies allow the policyholder to be covered if he is disabled. A life insurance policy can be customized with a “rider”
; that provides an “accelerated death benefit” to help pay the costs of care for a chronic or terminal illness.Misconception: You don’t need life insurance if you’re single, young and healthy.
Life insurance can sound like an unnecessary expense when you’re single, young and healthy. In fact, the best time to buy life insurance is when you’re young and healthy, as premiums are lower and you can lock in a reasonable interest rate. A younger person can also invest in whole life insurance, which covers you for a lifetime and builds equity that you can borrow against in the future – it’s a win-win.
Misconception: Life insurance is expensive.
Life insurance can be very affordable. Term policies have lower premiums, provide coverage for a set number of years, usually up to 30, and over time, as your income increases, can often be converted to a whole life policy that builds equity. The cost depends on many factors and can be adjusted according to your purchasing power. In general, the younger you are when you buy insurance, the lower the monthly premiums will be.
Misconception: You don’t need life insurance if you’re covered by your employer.
Many employers offer life insurance to employees. Keep in mind that you are only covered as long as you are at the company. Even if you remain with an employer for many years, your insurance will end when you retire or are employed elsewhere. Instead of relying solely on your company’s policy, you should find additional coverage for guaranteed protection.
Misconception: Policies must be in the buyer’s name.
Life insurance can be purchased by anyone who is not a minor and has a regular source of income. This means you can buy life insurance to cover you, your spouse or your children. Additionally, business owners can purchase life insurance policies for key employees, owners or partners, with the business named as the beneficiary.
Our local agents are here to help.
Life insurance is one of the best investments for your business or family. The death benefit is not subject to tax and gives beneficiaries the support they need to pay a mortgage, regular bills and the costs of raising children. For help choosing the right policy to fit your budget, our local agents are here to help.
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