Musings Of An Empty-Nester – Life Insurance Myths Busted

Key Takeaways:

-Many couples believe they no longer need life insurance once their children are out of the house.

-You may need insurance even if you’re young and healthy.

-Your insurance policy can cover more than just your final expenses.

-Your children’s education could be one reason to keep your policy.

-A decrease in income shouldn’t mean you cancel your policy.

As an empty-nester, your life insurance needs may have changed. Several misconceptions about life insurance can cause people to either under- or overestimate their need for coverage. Family First Life – Strong Tower & Hammer Lane Consultants brings you nine insurance myths to rethink as your family changes.

Myth 1: Life Insurance Is Only Beneficial After Death

Fact: Insurance is used as a risk management tool. The threat of death must not be separated from the fear of living too long. Medicine and science have extended life expectancy. How would you handle your spending if you lived to age 90 and stopped working at 60? Risk also relates to investments, which can be affected by market fluctuations, bad financial planning, or lack of financial discipline.

Insurance may assist you in protecting your financial future. Several alternatives can help you create a nest egg to support you during retirement, cover high medical costs, or build your net worth. You will always benefit from an appropriate insurance investment based on your specific requirements – suitability analysis.

Myth 2: Because My Company Covers Me, I Don’t Need Another Policy.

Fact: Your employer’s policy only protects you if you work for them. When you leave or retire, the coverage ends. If the firm experiences financial difficulties, it may withdraw the policy or reduce benefits. In that scenario, you will be left without protection if you need insurance when it is most required.

Employee insurance may be adequate when you are young, healthy, and have no responsibilities.

Your family’s future needs, such as children’s education, marriage, medical emergencies of aging parents, and the rising cost of living, won’t be covered by this. Additionally, the cover may only include a death benefit. So if you don’t have a financial plan for retirement expenses post-retirement, you’re on your own once you retire.

Myth 3: Why Would I Need Insurance If I’m Young, Single, and Healthy?

Fact: Life insurance is one type of coverage that cannot be purchased as needed. It must be purchased ahead of time when you require it. It’s a common saying that “you can’t insure a building during a fire.” It must be bought well before you need it, and there are several reasons for this. In addition, purchasing insurance while you are young will save money because the premiums are lower and high life cover at low costs is available.

An insurance policy can safeguard your parents from the debt of your student or personal loan in case of death, disease, or disability. It can also secure other family commitments and cover health-related costs and retirement expenses.

Myth 4: Life Insurance is Expensive

Fact: A life insurance policy is one of the most versatile and adaptable premiums available. It is based on numerous factors such as age, health, lifestyle, etc., which can be customized to best fit your current and future needs. Younger policyholders generally have a lower premium rate than older individuals.

It is important to note that you can potentially improve your financial situation by purchasing term insurance. Term insurance typically offers a high sum assured for a low premium. You may start with a modest investment and add to your coverage as your earnings and responsibilities change throughout your life.

Myth 5: Term Insurance is the Only Kind of Life Insurance

Fact: Term Insurance covers the risk of dying too early–one of many products insurance companies offer to address different risks that customers may face. When considering which policy to purchase, evaluate your current and future financial needs.

Myth #6: You cannot get insurance if you’re too old or have a pre-existing condition.

Fact: We must assess why the policies are being evaluated. Older age can lead to more appealing annuities and is thus an advantage for these products.

Pure risk policies (term) prices are generated with average assumptions of health conditions. If age or medical condition is unordinary, they will be priced to fit the higher risk. In some extreme cases, the policy may not cover the cost.

Myth 7: I Can Make Higher Returns From Investments Other Than Life Insurance

Fact: Insurance products have many features that should be compared similarly. For example, wouldn’t it make more sense to compare smartphones by their camera quality or browser rather than breaking up their components? In the same way, some features on offer include mortality risks, morbidity risks, return guaranteed by the policy, whole life cover protection, and others. Thus, simply comparing standalone features, the customer might not get clarity or a holistic perspective on which product is best for them.

The main distinction is that most of these policies’ proceeds are tax-free. Insurance policies are long-term financial instruments that, in the long run, provide competitive risk-adjusted returns compared to other asset classes.

Myth 8: ULIP Isn’t a Good Investment Because the Costs Are High

ULIPs offer the combined benefit of security and wealth creation in the long term. Some ULIP providers refund mortality/ other charges on maturity with common deductions. Furthermore, you can customize your policy to add or remove features as your needs change. And if that’s not enough flexibility, know that you can switch between debt and equity funds without tax implications!

Myth 9: The Policy Can Only Be Purchased by the Person Who Bought It

Fact: If you have a regular source of income and are not a minor, then you’re able to buy an insurance policy in your name, your spouse’s name, or even your child’s name. In some cases, insurers will offer joint insurance policies that cover both spouses for one premium. Parents can invest in a kid’s plan to safeguard their children’s future needs. When the kid reaches the age of 18, the insurance vests in their name if they are still a minor.

Life Insurance in Weatherford, TX!

We understand that each family is unique at Family First Life – Strong Tower & Hammer Lane Consultants, serving Weatherford, TX. We offer a variety of policies to ensure that you and your loved ones are taken care of in the event of your untimely death. We offer term and whole life insurance policies.

Contact now to learn more.

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