Friday, August 14, 2009

7 Life Insurance Myths That Can Cost You

from : usaa.com

Discussion around laptop

Life insurance is an important part of a well-rounded financial plan. But let's face it — it can also be confusing. In fact, misunderstandings about life insurance cause many people to skip the coverage altogether, putting their families at great risk for financial hardship. Here, we set the record straight on seven common myths about life insurance.

Myth 1: Single and young people don't need life insurance.
Truth: Your key question should be: Will anyone be worse off financially if I die? Even if you have no dependents, you might leave behind credit card debt, student loans, a car payment or funeral expenses.

A small life insurance policy would cover these costs. Moreover, buying while you're young can help you lock in lower rates and guarantee coverage if you develop health problems later in life.

Myth 2: Only people with kids need life insurance.
Truth: Chances are your spouse depends on your income, regardless of whether you have children. Could he or she manage to pay the mortgage and all other household bills and debts alone? A life insurance policy could help your partner keep the house and maintain the same standard of living.

Myth 3: If your employer provides coverage, there's no need for more.
Truth: Many corporations provide their employees with free life insurance worth once or twice their annual salary. Similarly, the military's Servicemembers Group Life Insurance (SGLI) offers great rates on policies up to $400,000. These are nice benefits, but if you leave your company or the military without a separate policy in place, it may be difficult or even too late to purchase one when you need it most.

Myth 4: Life insurance is too expensive.
Truth: It probably costs less than you think. For example, a healthy 30-year-old male can get $250,000 of 20-year term coverage for less than $15 per month.1 And as average life expectancies continue to increase, life insurance prices keep going down.

Myth 5: Insurance policies are all the same.
Truth: Policies that have similar names may differ substantially in what they cover. So before you buy based on price alone, it pays to read the fine print.

Myth 6: There's no reason to insure a stay-at-home spouse.
Truth: Your stay-at-home spouse may not earn an income, but think of the services he or she may provide for free: child care, meal preparation, housekeeping and more. With that spouse gone, life suddenly gets a lot more expensive. Life insurance can defray the cost of hiring help in your partner's absence.

Myth 7: Buying life insurance is a hassle.
Truth: Today, you can use simple online tools to determine your life insurance needs, compare options and apply on the spot. Explore at your own pace with no high-pressure sales tactics. And if you have questions, call us.

12 comments:

Tee Chess said...

Wow. I do have some of those opinions and really surprised to know that I am doing several mistakes regarding the life insurance. Thank you so much for sharing this post and clearing all my doubts and showing me the correct way.
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Blue b said...

The cost that brings the Satisfaction and confidence of your children is much more precious. So to make them sure of your love and care buy kids life insurance for them.

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James said...

Have to say I agree, cannot leave loved onces behind in case of forces beyond our control. None of us are promised tomorrow, and I feel more at ease knowing my wife and son will be taken care of financially in case of an emergeny. http://selectinsurancenow.com/

Shanna White said...

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TalentsFromIndia said...

Ha ha...it is so true...even one of my friend was having same problem...thanks for sharing & clearing most common myths thanks Life Insurance

wandy jack said...
This comment has been removed by the author.
wandy jack said...

Wasp dudes! Awesome stuff keep it up.
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matt joe said...


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