Life Insurance Myths Debunked

by Lithium Technologies ‎04-06-2015 11:03 AM - edited ‎06-01-2015 10:32 AM (6,610 Views)

 

Life insurance can be an important part of your financial planning—and securing your family’s future. Learning fact from fiction can help you make wise decisions.

 

MYTH: “I don’t need life insurance; I’m single.”

TRUTH: There are many scenarios that make life insurance a good idea for single people. You may have elderly parents who depend on you for their care (or will in the future). You may want to leave funds for a family member, such as a niece or nephew, or even make a financial contribution to an alma mater or a beloved charity. And some life insurance policies can have value other than a death benefit. Universal life insurance, for example, grows cash value over time, and loans can be taken out on the value of the policy at a fixed rate.

 

MYTH: “Life insurance costs too much.”

TRUTH: Most people tend to overestimate the cost of life insurance. Term life insurance is a particularly affordable option that can be an economical way to provide valuable life insurance protection. The coverage lasts for a specified period of time and can give you the added peace of mind of knowing that your loved ones  will not be financially burdened in your absence.

 

MYTH: “I have to buy a separate policy for each child I want to insure.”

TRUTH: Many types of life insurance can be customized to meet your needs. Should you decide to purchase coverage for your children, you may be able to use “riders” to add on coverage for them. The riders add layers of protection and benefits that are not part of  the standard policy.

 

MYTH: “I can’t get life insurance because I’m a senior citizen.”

TRUTH: There are policies available to senior citizens, and they can play an important role in the handling of final expenses, which might otherwise burden a surviving spouse or other family members. The sooner you take action to obtain a policy, the more coverage choices you’ll enjoy. You’ll also have more attractive premiums.

 

MYTH: “As a stay-at-home parent, I’m not drawing pay—so I don’t need life insurance.”

TRUTH: Individuals such as stay-at-home parents provide a valuable contribution to a household, even though they may not be earning a paycheck. A surviving spouse who is employed may need to pay for services like housekeeping and child care that were previously performed without financial compensation. 

  

For a better understanding of life insurance‹and to see if you have any false assumptions of your own‹make a plan to talk to your AAA Life Insurance Specialist or visit AAA.com/Life or call 1-888-422-9760.

 

A version of this story appears in the May/June 2015 issue of AAA Living magazine.

 

Image credit/source: Alex Nabaum/theispot

 

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