September is Life Insurance Awareness Month. Do you have a life insurance policy? Perhaps you have heard misconceptions about life insurance and are puzzled about what life insurance is and how it can protect you and your family. Life insurance is a contract between an insurance company and a policy owner. The insured person pays premiums to the company. If the insured person passes away, the insurance company is legally bound to pay the policy’s designated beneficiary a death benefit. Let us look at a few of the misguided views about life insurance.
Misconception #1: It is too expensive.
Experts estimate that more than 50 percent of Americans overestimate the cost of life insurance and not merely by a small margin. These responders overestimate the cost of life insurance by 300 percent. The truth is that life insurance can be affordable. Your gender, age, and health are some of the factors involved in determining your monthly premium. Many younger people in their 20s or 30s choose a term life insurance plan that offers relatively affordable coverage for a set number of years. One might purchase this type of insurance to safeguard dependents from the unexpected demise of one or both of their parents. The death benefit would be paid out only during the preset term.
On the other hand, a whole life insurance plan will cost more than term life insurance, but the benefits are more substantial. Part of your whole life insurance premiums will go toward a cash value component and grow over time. After you build up enough cash value, you can borrow against it or surrender the policy for cash. Whole life insurance has higher premiums, but there is peace of mind knowing that you are protecting your family and growing funds for the future. To help you weigh the pros and cons of each type of life insurance, call Empower Brokerage to speak with a friendly licensed agent at (888) 446-9157 to help you determine what plan is right for you.
Misconception #2: Stay-at-home parents do not need life insurance.
Yes, stay-at-home parents also need life insurance. If that parent were to pass away, the other parent would more than likely need to cover the costs of childcare or daycare for young children. A situation like this one is uncomfortable to discuss or think about, but protecting your family with life insurance can make the financial aspects of this challenging circumstance easier.
Misconception #3: Employees with group insurance do not need life insurance.
Obtaining group life insurance with your employer is certainly beneficial. If one were to pass away while still employed by the company, surviving family members could receive much-needed financial help. But will it be enough to cover the loss of the deceased family member’s income? Probably not. Costs may include paying for the house mortgage, one or more children’s college education, and day-to-day living expenses for many years. Families will need to protect themselves with additional sufficient life insurance coverage. Group life insurance coverage also ends after you cease employment with an organization. So, if you switch jobs or stop working for a short period of time, you will no longer have that safety net.
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Life Insurance Questions?
We hope that this information on life insurance misconceptions is useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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