Life insurance financial products can be very complicated. For the average consumer, understanding the terms and conditions of all of the life insurance products on the market is practically impossible. It is not until you meet with an insurance agent and discuss all of the terms and underwriting guidelines that you can truly get a handle on what you are buying. But some very common misconceptions can deter you from making the right investment into the right product. Do not let the 5 following misconceptions steer you in the wrong direction and know what you need to know to purchase protection.
Myth #1: My Employer-Sponsored Insurance is Adequate
If you receive life insurance as an employer-sponsored benefit, you might think that you have plenty of coverage. The typical work life plan will cover one to two times your annual salary in the event of your death. What many do not know is that even two times your salary is not enough to protect your assets and provide for your spouse. Some term life policies available through your work also have exclusions that you may not be aware of. This is why purchasing individual life insurance is so very important.
Myth #2: I Do Not Need Insurance If I am Single and Do Not Plan on Having Children
Just because you enjoy living the bachelor lifestyle right now does not mean that things will not change in the future. If you are single and you do not have dependents it does not mean you do not have a need for life insurance. Even the most basic plan will help cover your funeral expenses and pass on a legacy to your family members you care about.
Myth #3: I Do Not Need Life Insurance If I am a Stay-At-Home Parent
Many stay-at-home moms and dads do not have insurance on themselves because they believe that only the breadwinner needs coverage. If you think that you only need to cover your spouse because they bring home income, think about what expenses your spouse would need to cover if you were gone. From childcare expenses, to even maid services, you are valuable and you should carry insurance as well.
Myth #4: Everyone Needs Life Insurance
While most life insurance agents will argue that everyone has a need for life insurance, this is not always the case. If you have plenty of money, no dependents, and enough to cover your estate taxes, you may want to consider self-insuring. If you have no assets, debt, enough money to pay for your funeral, and insurance is too expensive, you may not even need insurance.
Myth #5: You Should Invest Your Money Instead of Buying Insurance
You might think that saving is a much better option. You will need to consider how much you would need to accumulate just to match what your life insurance would pay upon your death for a small premium. If you are young, you have to consider the ups and downs of the market and how they can affect your portfolio. When you have life insurance in place, you know that even when your investment drops in value, you have coverage.
Now that you have more information on life insurance, it is time to call a life insurance agent to discuss your situation. Determine how much coverage you need, which type of insurance product is right, and which life insurers offer the best products at the right price. Visit the Lloyds website for more insurance news.
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