Life insurance is a form of insurance that features a number of benefits for your relatives, such as immediate access to a given amount of money following your death. Yet, despite its practical usefulness, there are many individuals who hesitate to purchase it for some reasons, or make poor decisions when choosing one of those plans. For example, certain people question the need to buy life insurance while they're still in their 20s. This article discusses some of the common misconceptions that you might have about life insurance policies.
You think you don't need to buy life insurance
There are many people who believe that life insurance is only for the elderly. This is because of the false assumption that by then, they'll have enough money to buy such policies. However, life is filled with unexpected events. Imagine, for example, that you contract a rare disease that forces you to use up all of your savings to pay for medical treatment.
Assuming that you manage to win the health battle, you'll hardly have money to afford retirement home expenses. Nor will you able to leave anything for your funeral expenses, which means that these will have to be handled by your already grieving relatives.
Your employment-based life insurance coverage is enough
Getting life insurance from an employer is a work benefit that must never be discounted. However, to think that such a policy is enough is a mistake that you must never make. As you might know, the main advantage of employment-based life insurance policies is their very low cost. In fact, in certain cases, they may even be free depending on the company you're working for.
But you should also understand that those policies come with a large number of restrictions. Indeed, one of the few things they cover is the costs associated with your passing. So if you used to think that they would also provide your relatives with financial support after you're gone, then think again.
Focusing more on the monthly cost rather than on the payout
When it comes to life insurance, the larger the monthly amount paid, the larger the payout. This is why you should focus more on policies that are slightly more expensive, even if they cover events that you know you don't need right now, but that will give your family access to a large amount of money down the road.
When shopping for life insurance at a local place like Reed & Baur Insurance Agency, make sure you don't let these misconceptions prevent you from purchasing the right policy.