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- Many young people think that they do not need life insurance because they are healthy or do not have children.
- But if you have debt — such as private student loans — life insurance is essential.
- It is also important for stay-at-home parents and spouses with whom they share their finances.
After my husband and I got married last year, our financial to-do list started growing rapidly. Suddenly, we find ourselves struggling to make decisions about how to combine our money, what joint investments we should make, and what kind of future planning we should do now, even though we’re only 34 years old and don’t have any investments. Children.
That’s when the topic of life insurance entered the conversation. We found ourselves going back and forth about whether or not we needed it now, and whether paying for it monthly would be a good use of our money.
While we’re still in the decision stage, I’m starting to learn more about it life insurance policies And all the different opinions out there.
That’s why I decided to ask financial planners to deconstruct the biggest myths about life insurance that prevent people from getting the coverage they need.
Myth: You don’t need life insurance if you’re young and healthy
One of the reasons my husband and I put off getting life insurance right away is because we are young and in good health. But the financial planner Andrew Rosen He says that having that kind of mindset holds you back from planning appropriately.
Which is why Rosen stresses that people should remember that no one knows what their future looks like, because your health can change in an instant, and life insurance is also a way to start building your wealth now.
“There is a misconception that life insurance is only for death benefits, and many people don’t understand The cash value This correlates with some form of life insurance,” says Rosen.
Even if you’re young and healthy now, Rosen still says it pays to sit down with a financial planner and discuss your options, because he believes life insurance can help you reach your financial goals.
Myth: Stay-at-home parents don’t need life insurance
While my partner and I work full time now, it is not yet decided how that might change once children enter the picture in the future. Which made us wonder if we both need to have policies now, in case one of us stops working later.
financial consultant Jason Seberstein He says that, regardless of your employment status or whether or not you earn an income, life insurance still matters.
“Even if a parent dies at home, the cost of replacing childcare or other homework can be expensive or even financially disastrous if not planned accordingly,” Seberstein says.
Myth: I’m single, and I don’t need life insurance
When my husband and I talk to our friends, some of them are against getting life insurance just because they are not currently married.
But the financial planner Kevin Dreger He says that even if you’re single, it’s important to consider life insurance because if something happens, you can leave debts such as private student loans, car loans, mortgage or credit card debt that someone might be responsible for, such as parents or family members. others.
“A life insurance policy can help cover your final expenses and take care of outstanding debt,” Draeger says.
Myth: An employer’s life insurance policy is sufficient
As a self-employed individual, I do not have access to a company life insurance policy, although some people do.
Draeger says that while life insurance policies issued by employers are generally a great benefit, they may not always be enough to protect your family in the event of your death.
“Many companies will offer one to three times the employee’s base salary, but that may not be enough to pay for final expenses, outstanding debt, your mortgage, and future income loss for your family,” Drager says.
There are more logistics that come with an employer policy that Draeger says to consider. For example, employer policies are not necessarily foolproof. If a company goes through tough financial times, life insurance benefits can be withdrawn.
Draeger also says that if you leave the company, you usually won’t be able to take that benefit with you at your next job.
Myth: Life insurance is too expensive
After marriage, my husband and I wanted to limit our expenses to achieve other financial goals. We wrote off getting life insurance as just another major expense.
But Dräger advises that you keep in mind that life insurance will not be as affordable as it is today.
“Prices are generally lower when you’re younger and healthier, so don’t wait to find a policy,” Draeger says. “Certain types of life insurance Providing a living allowance in addition to the death benefit. These policies may provide cash value that can be borrowed, and the money in a life insurance policy will generally be Tax deferred grow. ”