Only a third of the American population owns life insurance, even though 70 percent of households claim they would experience financial trouble if the primary wage earner died. Why is there such a wide gap? Unfortunately, many people are led astray by poor advice or myths. Below, we discuss three pieces of bad advice about life insurance. With this knowledge on hand, you’ll know to seek out the help of your independent insurance agent if you hear any other myths.
The life insurance offered through your employer is enough.
Many employer-sponsored life insurance plans do not offer enough coverage to provide for your family’s financial needs beyond several months. Additionally, these policies often offer group premiums, which means people in good health may pay more and people in poor health may pay less than they would if they purchased individual coverage. These policies may also be void if you leave the company. Buying your own life insurance is the best way to ensure the best possible price for the full amount of necessary coverage.
Only working individuals need life insurance.
While replacing a salary is an important consideration, it’s also crucial to consider the contributions of stay-at-home parents. Their responsibilities—cooking, cleaning, childcare and more—often save the family money. Without that individual, the surviving spouse may have to work fewer hours (and therefore receive less pay) to take over some of those responsibilities and/or pay to have them taken care of. Life insurance for non-working spouses can prevent these financial woes.
Term life insurance is better because it’s cheaper.
While term life insurance does cost less than permanent life insurance, it only lasts for a limited time. Once the term is up, you can either purchase another term or convert the policy into a permanent one. However, your rate is only locked in for the duration of your initial term, which means that you could face higher renewal rates if your health has worsened or if you’re deemed a higher risk for any other reason. If you want coverage that will last the rest of your life, a permanent life insurance policy may be more affordable in the long run.
We’re here to offer good advice. Call Loftis & Wetzel Corporation at 405-530-4019 for more information on Oklahoma City life insurance.