The topic of life insurance is often met with frowns, discomfort, and reluctance. And we understand why. Thinking about your own death is not an easy think to contemplate. However, obtaining a life insurance policy may be one of the smartest decisions of you life because it can help provide for your loved ones after you’re gone.
Much of the hesitation surrounding life insurance are several misconceptions about how life insurance works. In fact, most of these misconceptions are flat-out myths altogether. To understand life insurance and its importance, read further.
I don’t need life insurance because I’m either single or married with no children.
Just because you aren’t married or have children doesn’t mean a life insurance policy wouldn’t benefit you loved ones greatly. In the event of your untimely death, the money from a life insurance policy can help you loved ones pay off any debts you left behind. A mortgage and paying off a car are serious matters. Your loved ones already have to cope with the heartache of you not being around anymore. Why make matters more difficult with financial burdens?
I can’t afford life insurance.
This is a commonly shared belief. Believe it or not, life insurance is extremely affordable. A policy may be customized to fit your specifics needs and budget. And, in the case of life insurance, a little can go a long way. In fact, policies may be less expensive than that cup of coffee you’re buying every morning on your way to work. Call our office and ask to speak with one of our experienced life insurance professionals. They’ll be happy to answer any and all questions you may have.
I’m a stay-at-home parent that doesn’t earn an income. I have no need for life insurance.
Just because you may not be earning a paycheck doesn’t mean your time isn’t valuable. In fact, if you’re a stay-at-home parent, chances are that the tasks you’re completing on a daily basis could cost thousands and thousands of dollars every year if you were going to pay someone to do them. Hiring professional caregivers or house cleaners doesn’t come cheap. If you were to die, a life insurance policy could help to cover the costs of hiring some help for your loved ones.
I have a life insurance policy through my employer. If I choose to take on another job or get fired from my current job, I can take the policy with me.
When you purchase your own life insurance policy, you afford yourself more options and more overall flexibility. If you have life insurance through your work and you either lose your job or decide to leave it, typically, your life insurance policy stays with your employer. You can’t take it with you. This is another good reason to get your own life insurance policy. When you buy your own policy, you’re also able to customize it to fit your specific needs.
My beneficiaries will have to pay income taxes on the proceeds from my life insurance policy.
Generally speaking, your life insurance policy is income-tax free. This means that, if you were to pass away, your beneficiaries would be required to pay taxes on the benefit issued to them in the policy. However, any interest payments on top of the policy may be subject to a tax.
If I get a term life insurance policy, I can’t convert it to a permanent or whole life insurance policy.
Depending on the type of policy you buy, you may be granted an opportunity to convert your term life insurance policy to a permanent or whole life insurance policy. Call us to speak with one of our life insurance professionals at length. It is important to note that, most of the time, life insurance policies that are in force for a specific period of time must also be converted within a very specific period of time.
I don’t need life insurance once my children are legal adults.
If you die, a life insurance policy can help your loved ones pay for a funeral. If they do not anticipate possible estate taxes, a life insurance policy can help them with those surprise financial burdens. Finally, if you want to leave your children an inheritance, a life insurance policy is one way to make that a reality.
I have a comfortable amount of savings, so I don’t need life insurance.
The average cost of a funeral is over $7,000. It’s great if you have money saved for your children, but do you really want your children to have to use most of that money for your funeral? Saying goodbye is hard enough. Don’t add financial stress on top of what your loved ones are already struggling with.