Three main misconceptions people have about life insurance
Why purchase life insurance? We break down why you may need it and talk about misconceptions.
Most people know life insurance helps provide financial security to loved ones after they pass away. But life insurance has many other benefits, including helping beneficiaries cover joint debt, replacing lost income, paying college tuition for children, protecting your business and helping you leave a legacy. A lot of people put off buying life insurance because of misconceptions they have about it. Here are three of the biggest:
Misconception 1: It's too expensive
Many consumers don't even think about trying to get life insurance because they assume the cost factor for life insurance is going to be too high and therefore too expensive for them to afford. There are several life insurance risk factors that affect life insurance premiums, including the type of policy, age, gender and personal health history. However, it's actually more affordable than many people think. In general, over half the population thinks term life insurance is over three times more expensive than it actually is.
Misconception 2: It's too complicated
Many people shy away from trying to get life insurance because they assume the quoting and purchasing process is going to be too difficult or complex. They assume that they have to gather a bunch of medical records, go into the office, meet with an agent, take a medical exam, etc. By answering just a few simple questions you can get a life insurance quote online.
Misconception 3: It's not for me
Many people have a limited knowledge of life insurance, which often leads to a lack of understanding of why they even need life insurance in the first place. People often don't know where to begin and don't want to sound silly by asking the "wrong question."
There's a lot to understand about life insurance, and we want to make sure you have all the information you need to make informed decisions about protecting the financial future of your family. We encourage you to learn more and discuss your unique needs with your local State Farm® agent.
1: MISCONCEPTION: IT'S TOO EXPENSIVE
REALITY: IT CAN BE AFFORDABLE
Many people put off purchasing life insurance because they think it costs too much. The cost of life insurance varies according to many factors, including:
- TYPE OF POLICY
- AGE
- GENDER
- HEALTH HISTORY
- FAMILY HEALTH HISTORY
- SMOKING STATUS
- DRIVING RECORD
- OCCUPATION
50%+
In general, over half the population thinks term life insurance is over three times more expensive than it actually is. [1]
2: MISCONCEPTION: IT'S TOO COMPLICATED
REALITY: IT'S EASIER THAN YOU THINK
Yes, there are a lot of options when it comes to life insurance, but there are three main types:
- TERM LIFE: Purchased for a specific period of time – usually 10, 20 or 30 years.
- WHOLE LIFE: Provides lifetime coverage and builds cash value.
- UNIVERSAL LIFE: Provides lifetime coverage, builds cash value and features flexible premiums and death benefits.
3: MISCONCEPTION: IT'S NOT FOR ME
REALITY: CAN BENEFIT EVERY LIFE STAGE
Coverage is important for people in a range of situations and at all stages of their lives.
Life insurance is for:
- Young couples with children. Benefits - Provides future financial security.
- Young couples without children. Benefits - Covers joint debts such as a mortgage.
- Business owners. Benefits - Can fund business succession planning.
- Retirees. Benefits - Plays an important role in estate plans; helps distribute assets to heirs or charities.
[1] https://www.valuepenguin.com/average-cost-life-insurance
