While some individuals can scrimp and save for the future, life insurance has become a financial instrument that individuals simply cannot overlook. By covering yourself with life insurance, you can guarantee that your family can maintain their quality of life even after you are gone. While many people throughout the state realize the importance of carrying life insurance, there are a number of misconceptions that deter people from applying for coverage. Here are some of the many misconceptions that are deterring people from really understanding the benefits of being covered:
Misconception 1: There is No Need to Review and Change Your Insurance As You Age
When you buy a car, you know that your vehicle will require regular maintenance. While you do not have to maintain your life insurance policy every 3 months, you do need to take time to review your insurance from time to time as your lifestyle changes. Everyone experiences major life changing events from time to time. If you purchased your insurance when you were single, you may have different needs now that you are married. If you have children, you now need to consider how much you need to provide your children. Over time, you may also need to change the beneficiaries on your policy. If you think that the same policy that you have had for 10 years is going to be sufficient, think again. Make sure to review your insurance annually and modify your insurance to meet your current needs.
Misconception 2: Life Insurance is Designed Only For Those Who Are Married Or Have Children
If you are a single person with no children, you might picture life insurance applicants as middle-aged, married individuals who live in a suburban community with their 2 and a half children. What you might not know is that life insurance can be a great tool for young individuals who want to watch their money accumulate in a tax-deferred financial instrument. When you choose a permanent life insurance policy at a young age, your premiums will remain fixed and more of the premiums you pay will accumulate interest. If you purchase a term life policy while you are young, you will have peace of mind in knowing you are covered when you become that middle-aged married individual you were picturing earlier.
If you do not plan on marrying or having children, you still need to consider who will be paying for your final expenses when you pass on. If not for these expenses alone, everyone should take time invest in some type of life insurance so that they do not put a burden on the ones they leave behind.
Misconception 3: The Financial Benefits Only Exist if you Die
Life insurance can be a very versatile instrument if you are familiar with all of your options. While term life insurance does only offer benefits if the insured passes on, a whole life insurance plan gives policyholders the options to borrow against their policy while they are living. If you need money to pay bills or for a down payment on a house, your whole life plan can help you.
Misconception 4: You Already Have Enough Insurance Through Work
One of the biggest objections that New Jersey insurance agents hear from clients is that they are covered by their work. Your employer may offer you group life insurance benefits, but do you really know how these benefits work? The insurance policy is owned by your employer. This means they can cancel the benefits if they can no longer afford to offer them. Also, group life is generally limited to only one to two times of your annual income. Not to mention that when you change jobs or you retire, you will no longer have coverage.
Only approximately 41 percent of Americans own their own life insurance, according to LIMRA. This means that almost 60 percent of individuals are relying on their savings and their group policies to take care of their families. Life insurance can be a flexible product that can work for you while you are living and after you are gone. So, because September is Life Insurance Awareness month, it is time to learn more about this valuable tool now that you know your misconceptions.
Derek is an active blogger. This article is for new jersey insurance.