Myths About Life Insurance

September is life insurance awareness month so I thought I’d talk bout common myths about life insurance to shed some light on those.

Life insurance is only for those with kids or married people.

Single people do not need life insurance. If something happens to you and can’t work, how will you pay your bills? Will you be dependent on others to take care of you? Do you have any debt that life insurance can pay off? Life insurance can help you even while you are alive. If you suffer an illness, you can use the money to help pay debt and bills that you are unable to pay since you are unable to work.

I’m a stay-at-home parent, only the working spouse needs life insurance.

This is not true as the nonworking parent is still contributing to the running of the household, and taking care of the kids. If something happens to him/her, the working parent would miss work and would likely have a decrease in income. Life insurance, though it won’t replace the parent, can preserve the household income and take care of the needs of the family.

Life insurance is too expensive.

Expensive is relative. Expensive compared to what? For a healthy nonsmoking 35-year-old male, life insurance can be as much as $1/day vs the cost of a coffee per day. We buy life insurance so our loved ones will not suffer hardship when we are gone. With living benefits, you are also protected if you get sick. If $30/month can give your loved ones $250,000 tax-free benefits, think about the value that money can bring to them. If that can help you pay the bills if you can’t work, and avoid foreclosure or bankruptcy, is that an expense or a necessity?

I have life insurance through my employer, I don’t need to get more life insurance.

First, some employer coverage does not include life insurance and if they do, they are often low and will leave you with a coverage gap. Second, your coverage through work could disappear if you switch jobs or drop down to part-time hours. Having your own coverage allows you to count on it wherever your career may take you.

GoFundMe can help.

Shocking but true: only 12% of GoFundME campaigns for medical bills reach their goal (Source: American Journal of Public Health). Do you really want your family to be in financial stress while waiting for the campaign to finish and then come up with another way to pay the bills? In addition, GoFundMe charges a percentage of the donations.

Research found that 50% of Americans will need as much as $200,000 to close the money gap- the difference between your current coverage and what your family needs (Source: 2016 Insurance Barometer Study).

Take time this month to check in with me and close the money gap for your family.

Life insurance with living benefits can:

Help cover your bills while you are sick and can’t work
Give you more bang for your buck compared to just life insurance without living benefits
Handle final expenses and debts
Help make sure the dreams of your family don’t suddenly disappear a retirement for your spouse, college for children.
Help create multigenerational wealth
Did you know my Dignity Plan focuses on 3 often forgotten, but super important areas: The 3 L’s: Longevity, Long Term Care, Legacy? If you have not started or completed planning in any of these areas, reach out to me.

Second, I have a new ebook that I wrote for busy women and caregivers. They are too busy caring for others, that they fail to spend time planning for their own financial future. If you are a female, it’s a must that you get a copy. It’s free! If you are a male, it’s helpful for you to read it and understand the unique financial planning challenges that women face especially if you are the one managing the family investments. Then share the information with your wife, sister, daughter, friend, mother, niece, or granddaughter.

Sheilla Vidal is a Retirement Income Certified Professional RICP® and life insurance broker. Sheilla is also a physical therapist, wife, mother of two, and one of the caregivers for her 85-year-old father. She is an avid learner. She writes, speaks, and recognizes that her work in helping clients live with dignity is her God-given mission.