Here are three misconceptions that shouldn’t keep you from buying a life insurance policy or buying one sooner rather than later:
1. “It makes no sense to buy life insurance when you are still young, in good health, or single.”
Although most people will not actually use their life insurance policy in their 20’s, 30’s, or 40’s, nothing is guaranteed and you don’t want your family to be left unprovided for. And good health can change suddenly at any age. Even singles will not want to leave unpaid debts, funeral expenses, and other bills for their family or friends to take care of. And a single could list a charity as a beneficiary after all such debts have been paid. But the biggest reason to purchase a life insurance policy early in life, regardless of your current situation, is because it will only be more expensive to buy the same policy later on. Locking in low rates early is a wise move that can save you money besides keeping you covered in the meantime.
2. “It’s always best to buy term life, never whole life.”
Term life is the cheapest type of policy to purchase, and for many, it is the best route to go. It keeps you covered for a specified period of time so long as you pay your premiums but may not always guarantee renewability or as low a rate at term’s end.
Whole, or “permanent,” life insurance policies also have a place. They cost more, but they also accumulate “cash value” and can serve as a tax shelter, an interest-bearing investment, and a fund to borrow against when in financial straits. And of course, there is still a death benefit, which will pay at the end of your life (not end after a specified number of years.) If you can afford the higher premiums and need more than just a death benefit out of your policy, the multifaceted nature of whole life may be a better fit for your situation.
3. “I can’t afford to pay for life insurance right now.”
There are many affordable options for low-income earners, as to life insurance coverage. There are very few people who have any income at all who cannot afford at least a basic policy. But a second reason you shouldn’t wait to buy insurance until you are making more money is that most insurers will allow you to start off with a smaller amount of coverage and then upgrade later without penalty. But if you wait till you’re older to begin the policy, you could face higher premiums.
You can add “riders” to extend coverage from your spouse to your children as well, for example, or to convert from term to whole life. For answers to all of your life insurance related questions, or for a free quote, feel free to contact Flagler County Insurance Agency today.