4 Life Insurance Myths

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​Are you one of the millions of Americans with insufficient life insurance protection? There’s a broad range of reasons why people carry less insurance than they need. However, the fact is an insufficient coverage amount could lead to financial difficulties for your dependents and loved ones if you unexpectedly pass away.
 
Below are a few of the common beliefs and myths that keep some people from purchasing additional insurance. Do any of these ideas sound familiar? If so, now may be the time to reassess your life insurance strategy and explore additional coverage options.
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“You only need life insurance if you have minor children.”
There are reasons to buy life insurance even if you don’t have dependents. You may have a mortgage, business loans or other obligations that would need to be paid off after you die. You may want to provide funding for your funeral and other final expenses. You might want to leave a legacy for loved ones or a favorite charity. Life insurance can help you achieve a wide range of goals, even if you don’t have dependents.


“You should carry double your salary in life insurance coverage.”
The truth is that your coverage amount should be based on your unique needs and goals. Think about your specific goals for your family and loved ones after your death. Are there debts they would have to pay? Would they struggle to replace your income? Do you want to leave money for college funding or other goals? Estimate these costs and base your coverage on those figures.


“You don’t need coverage beyond your employer-based benefit.”
Many employers offer group life insurance coverage as an employee benefit. While this coverage may be a helpful resource, it may not be sufficient to meet your total needs. Many group plans have a cap on coverage, which means the benefit may not be enough to fully support your loved ones.


“You should always choose term insurance.”
Term insurance is temporary coverage that lasts for a defined period of time. Permanent coverage lasts your entire life, as long as you pay the premiums. In most cases, term policies are much more affordable than comparable permanent policies.
 
However, cost doesn’t mean that term is always the best option. Permanent policies usually have a cash value component that allows you to grow funds on a tax-deferred basis. You could possibly use that money in the future to fund retirement, college or other goals.
 
Also, a permanent policy means you will always have protection in place. With a term policy, you run the risk that the policy could lapse, leaving you without coverage. If you ever need life insurance in the future, you may find the premiums are no longer affordable because of your age or health. You can minimize that risk with a permanent policy.
 
Are you as financially fit as you thought when it comes to life insurance? Give us a call at DSM Financial to discuss your options and create a strategy that works for you.
 

Licensed Insurance Professional. Advisory Services offered through Change Path LLC an Investment Advisor. DSM Financial and Change Path LLC are not affiliated.
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This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 17555 - 2018/4/5
 
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