In honor of September being Life Insurance Awareness Month, the team at Montgomery Financial Partners wanted to take this opportunity to dispel common misconceptions surrounding life insurance.
The truth is: life insurance is incredibly important to your financial security. It allows you to protect your loved ones in the event of your untimely death. However, a recent study by Annuity.org showed that only 50% of American adults reported owning insurance in 2022. This marks a 13% decrease in policy ownership within the past decade.
In our experience, many individuals do not have life insurance is simply due to false notions and misunderstandings. That being said, here are the five common life insurance myths dispelled.
Myth: A beneficiary can only be a spouse or child.
The beneficiary of your life insurance can be a child or spouse, but it can also be a charity, a trust, or your estate. For example, if you have a nonprofit you feel passionate about, you can name it as a beneficiary to receive all or a percentage of your assets or insurance payout.
You also have the option to name other members of your family as your beneficiaries, outside of your immediate family. This option is especially valuable for someone who is taking care of their aging parents or persons with disabilities. Your life insurance policy will guarantee the protection and security of your loved ones once you are no longer here.
Myth: I’m young and healthy, so I don’t need life insurance.
The truth is, buying a life insurance policy when you are young and healthy can actually be an incredibly smart choice. The cost of insurance increases as you get older, so locking in a lower monthly premium early can actually save you money in the long-run.
Plus, even though you might not have dependents at this stage in your life, you can always change your beneficiaries as big life events happen!
Myth: I have life insurance through my employer, so I don’t need additional coverage.
Most of the time, employer-provided insurance is an excellent benefit, but that’s all it is, a benefit. It should not be your only form of coverage.
If you solely have coverage through your employer, we highly recommend examining your policy to ensure full covererage. The purpose of life insurance is to replace your income after you pass away, which means it needs to be able to cover living expenses, college tuition, outstanding debts, medical expenses, and anything else your loved ones will need help paying. If your current life insurance does not provide adequate coverage, consider seeking supplemental coverage to better secure your family.
Myth: Life insurance is too expensive.
I’m happy to inform you that a life insurance policy just might be more affordable than you think. If you do not currently have coverage, I encourage you to contact us today to review your options and learn about the policy that best fits your needs.
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