There are a lot of misconceptions about life insurance out there. I thought I’d share some myths I’ve come across and how they were debunked. Anyone else heard these or have any others to add?
Myth #1 hit close to home for me. I used to think life insurance was only for the breadwinner, but when I had kids, I realized how much it would cost to replace the things I do around the house if something happened to me. Definitely eye-opening!
@Shan
Exactly! People don’t realize that losing a non-working partner can still have a huge financial impact on the family.
I used to believe Myth #2—that I didn’t need life insurance because I was young. But then I learned that getting it while you’re young actually saves money in the long run since premiums are cheaper.
Blakeley said:
I used to believe Myth #2—that I didn’t need life insurance because I was young. But then I learned that getting it while you’re young actually saves money in the long run since premiums are cheaper.
Same here! I got mine when I was 25, and now my premiums are way lower than they’d be if I waited. It’s definitely worth locking in a lower rate while you can.
Myth #3 had me worried for the longest time. I always thought insurers would find a way not to pay out, but as long as the claim is legit, there’s no problem.
Briley said:
Myth #3 had me worried for the longest time. I always thought insurers would find a way not to pay out, but as long as the claim is legit, there’s no problem.
Right? It all comes down to making sure your application is accurate and you keep up with the premiums. No issues as long as everything’s in order.
The one about life insurance being too expensive is what held me back for a while. But when I finally got a quote, it was way more affordable than I expected. I wish I’d looked into it sooner!
Anyone else surprised by Myth #5? I thought life insurance payouts would be taxed, but it turns out they usually aren’t, except in some cases with inheritance tax. Putting it in trust is a good move if you’re worried about that.
@Clive
Yeah, I learned about trusts from my financial advisor. It’s a great way to make sure the payout goes directly to the people you want without tax issues or delays.
I always thought I didn’t need extra life insurance because I had it through work (Myth #6), but when I looked into it, the amount wouldn’t have been enough to cover everything my family would need. I ended up getting more coverage on my own.