Life insurance: Myths vs reality

Life insurance is a tool that helps individuals to accomplish their financial goals. The most common use of life insurance is to provide for dependent family members in necessary or unnecessary life events. Life insurance can also be used to fund certain goals, such as a child or grandchild’s future expenses. The ultimate gift can be given using life insurance by transferring wealth between generations and making charitable bequests.

Misconception 01: Life insurance is only for healthy, middle-aged adults

The Truth- The notion that life insurance is only for healthy, middle-aged adults is a common misconception. In reality, life insurance can benefit individuals of all ages and health statuses. Whether you’re a young adult in need of student loans or a senior citizen looking for some avenue to cover financial expenses. Life insurance is for anyone or everyone who wants to protect their loved ones from financial burden, leave a legacy, or supplement their retirement income. Don’t assume you don’t need life insurance because of your age or health, explore your options and find a policy that fits your unique needs and circumstances.

Misconception 02: If you have health issues, you cannot get life insurance

The Truth- Having a pre-existing health condition doesn’t automatically disqualify you from obtaining life insurance. While it’s true that health can influence rates and coverage amounts, there are specific types of policies designed to accommodate those with health concerns.

Misconception 03: I don’t need life insurance, since, my savings are enough for me

The Truth- Having a comfortable amount of savings in your bank account may provide a sense of security, but it’s not a replacement for life insurance. Life insurance provides a guaranteed payout to your beneficiaries in the event of your passing, whereas your savings may be depleted by funeral expenses, outstanding debts, and ongoing living expenses. Moreover, life insurance can also provide income replacement, business protection, and estate tax coverage, which your savings alone may not be able to match. Therefore, even if you have a comfortable amount of savings, having life insurance can provide an added layer of protection and peace of mind for your loved ones.

Misconception 04: Insurance companies are a scam

The Truth- While it’s true that insurance companies make money by selling policies, life insurance can provide peace of mind to policyholders and significant financial security to their loved ones. Life insurers must undergo several levels of scrutiny to receive a license. They must also employ underwriters, salespeople, and other professionals to create awareness about life insurance products. Scams are largely unregulated, and thus life insurance does not fit the definition of a scam. In the event of an unexpected death, life insurance can provide financial support to loved ones who may be left with significant expenses, such as funeral costs, medical bills, and ongoing living expenses. This can help ensure that loved ones are not left with a significant financial burden during an already difficult time.

Life insurance is a powerful tool that can provide peace of mind, protect the people you love, and enhance your financial wellbeing.