Common myths about life insurance busted

Fact:

Less than one in three consumers say they’re very or extremely knowledgeable about life insurance — and many Americans say they’ve put off buying life insurance because they don’t know what to buy or how much they need.

Knowledge and expertise are your friends.

A licensed life insurance professional can help you understand your options so you can buy the type of life insurance that’s right for you and your family. Today, six in 10 Americans don’t work with a financial professional on this topic.

Fact:

It’s often assumed that in order to qualify for life insurance, you have to see a doctor or answer questions about your health. But some insurance companies offer guaranteed acceptance life insurance with no medical exam and no health questions.

Fact:

If you’re unmarried with no dependents, ask yourself if you have enough assets to cover your personal debts, possible medical bills and funeral bill if you were to pass away. (The national average cost of a funeral is $7,848 for a burial and $6,970 for cremation.)

If the answer is “no,” you need at least enough life insurance to cover these costs. You don’t want to leave those unpaid expenses for your family or executor to deal with.

And if you have enough funds saved for these expenses, consider how life insurance benefits could help a sibling, or a nephew or niece pay for an education. Or, they could be used to make a generous donation to your favorite charity.

Fact:

If your only life insurance coverage comes from your employer, the amount of the policy — typically one or two times your salary — might not be enough to support your loved ones. But even if it is, it’s generally not portable.

Life insurance is usually one of the group benefits you lose when you retire. If you’re getting close to retirement, reevaluate your needs and think about how you’ll replace your life insurance coverage before you retire or leave your job.

Fact:

Obviously, it’s important for the person who provides the primary income to the household to have life insurance, but don’t underestimate the value of the contributions his or her spouse makes. Child care, grocery shopping, meal prep, cleaning, transportation, bookkeeping and household management are all valuable contributions that would be expensive to replace if the spouse passes away.

Fact:

Younger people who don’t have a spouse or dependents sometimes put off buying life insurance.

But the reality is that life insurance premiums can be relatively low, especially for younger people. Getting coverage early can help you lock in low rates. In fact, four out of 10 life insurance policy owners say they wish they had purchased coverage at a younger age.

Good information for you if you’re on the young side. Or, if you have kids or grandkids, let them know that buying life insurance when they’re young can help them protect the financial security of their future family.

Fact:

Circumstances change. Different stages of life call for different amounts of life insurance coverage. Every few years — or anytime you experience a life-changing event — sit down and evaluate your family’s needs to ensure your current coverage is adequate. A licensed life insurance professional can help.