Killing the life insurance myths that hurt young families

Submitted by carol on Mon, 09/04/2017 - 11:00

Do you find life insurance to be costly? Do you think there’s absolutely no point in purchasing one as you don't have any dependents? Or do you think you must have a life insurance at any cost? Let me tell you, you are fishing in the wrong waters. These are misconceptions you should get rid of right away! I can understand how it feels when you try to take your first step into the world of insurance. Here we will kill the life insurance myths that hurt young families. The insurance agents barely break the long silence of insurance policies. What happens is you end up with several blind thoughts.

Myth-1: Life insurance is not important

Life Insurance secures your future and of those who wait at the dinner table for you every night. The insurance companies collect your payments and generate a good compensation value for your life if anything really bad happens to you. So you can pretty well see, it is very helpful for those dependent on your income. Now, unlike any other insurance policies, life insurance acts as a good investment strategy. The insurance companies will save a part of your total cash as a building monetary asset. Those duly payments of yours build in value over time.

Myth-2: If I own great property and wealth, I should not consider life insurance

Well, it’s time to figure it out. If you think you have enough wealth to fuel your future, then you can skip one. But remember to do your math right. This is a question of life, death, and future. Anytime you feel, your savings are decreasing, or the urge to save some money for beyond-life benefit, don't forget to touch life insurance! If you are are a man of sufficient wealth, consider life insurance as a social work. Insurance means sharing of risk factors among individuals in a society.

Myth-3: If I am the only source of income, other members of my family don’t need life insurance

Obviously! This is the most absurd question I always hear. Just because you earn, you are special, and the other’s not? If your spouse looks after the little kid, and do all the household stuff, while you are busy pumping cash, she’s doing a great job, say salute! Just imagine the cost to replace her, approx $500 for babysitting, $1000 for other stuff like cooking, cleaning and what not, that makes $1500 per month. You think that’s little? Immediately cut down this principle that only the breadwinner needs a life insurance. We all need a life insurance policy. Moreover, it is your responsibility to get the other members of your family insured if you are the only earning member!

Myth-4: Life insurance is too expensive

This is a bit tricky. It is advised to save at least 10 times of your annual income as life insurance. So if you earn $50,000 per year, your life insurance policy should be around $500,000, if not less. The price of premiums of a life insurance policy depends on a lot of factors. Your health, weight, past driving and criminal records, use of medicines and mental health will all go into the account. To be precise, if you are a chain smoker and binge user of alcohol, you will probably end up paying more for life insurance premiums than a fully functioning healthy, addiction-free individual. So try to live a healthy lifestyle, get yourself insured on time, and live headache free.

Myth-4: Choosing between what is better - Term or whole life insurance?

Term life insurance is better in the sense that it is budget friendly. But there’s a huge drawback. The company will pay for any mishaps only within the term of the policy. So, if you are thinking of a long future, I would suggest you to purchase a whole life insurance policy. It may be a bit expensive than term life insurance, but you get optimum financial security. You can forever be assured of financial backups during any point of your life. The investment strategy that I talked about earlier in this post, is applied in this whole life insurance. A nice portion of the premiums that you pay on your whole life insurance will be invested as annuity by the insurer. This you can claim, after the annuity matures, anytime you want, while you are alive. You won't get the same benefit in a term life insurance. So, make a wise decision before you plan to purchase one.

Here’s a basic sum up to bust all life insurance myths:

  • Everyone in a family needs life insurance, independent of who’s the breadwinner.
  • The cost of life insurance is directly proportional to your lifestyle. The more unhealthy lifestyle you live, more premiums you have to pay.
  • As a starter of a young family, whole life insurance should be best. Start to budget accordingly.
  • Term life insurance has no cash value.
  • Life insurance is not health insurance. Your life insurance won’t cover any claim related to a medical emergency.
  • If you have enough assets and savings to sustain both your life and beyond-life costs, then you can avoid one.


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