The most important policy you may think you don’t need
You lock up your home at night. You secure your children in 5-point harness car-seat systems and make sure you buckle up, too. You keep emergency numbers posted on the fridge, right near the phone. Then, with these things in place, you carry on.
And that’s our segue to a discussion on the king of the just-in-cases: life insurance. Understandably, this one tends to stir heebie-jeebies that other safeguards don’t. But, it’s important to think of life insurance coverage in the same way you do your smoke detectors (bonus tip: test them monthly): not as an expectation of the worst, but as a smart and critical measure of protection.
Potential discomfort aside, there are other reasons that people may avoid the pursuit of life insurance—and many are based in misconception. Consider these common myths:
- I’m single and have no kids; there’s no point in having life insurance.
Most people do think of life insurance as financial protection for spouses and dependents, and they’re not incorrect. But no matter your situation, you’re an individual, not an island. Life insurance can be about extended family, close friends, business associates, even charities you support. At its most basic, it’s also about taking care of any debt or other financial commitments you may leave behind.
- My employer-provided life insurance is all I need.
If you are, in fact, single and have no children, a plan offered through work may be sufficient. For a family, though, the payout on these plans is typically inadequate for living expenses; additional coverage is usually warranted.
- Only the breadwinner needs life insurance.
You may not bring home the bacon, but what about your ability to cook it up just right—not to mention everything else you do? It’s difficult to put a monetary figure on home and family management, but the value of those contributions is significant; as such, the loss of either spouse/parent will change a household’s financial landscape. For example, some families find they need to hire help for child care or housekeeping. Your insurance agent can develop a customized cash flow analysis to help determine your needs.
- Life insurance is super expensive.
Many people hold this belief, until they are pleasantly surprised to learn it isn’t true. Policies and premiums vary widely, of course, but they’re designed to fit both needs and budgets. Your agent can help you find a suitable, affordable policy.
- My health is too poor.
No one should let a mediocre bill of health deter them from exploring life insurance. Although having a common chronic condition, such as diabetes or high blood pressure, can mean higher rates, it seldom places coverage out of financial reach. In many cases, policies are available even to those with serious medical issues.
- My health is too good.
Even though you can usually acquire life insurance in sickness and in health, you’re far better off with the latter; your stellar wellness can mean the best price possible for the coverage you need. Since monthly premiums directly correlate to state of health (among other factors), it pays to stay ahead of the game.
- I’m better off investing or setting up savings than buying life insurance.
These measures can be beneficial, but they’re no replacement for a life insurance policy. Unless you have excessive wealth and/or no dependents, it’s unlikely that money saved or invested will accrue to an adequate level in the event of your passing. Experts consider life insurance an invaluable piece of an overall plan for financial security.
- I’m too young to worry about life insurance.
On the contrary; the sooner you address it, the less worry you’ll have. Not only are you bound to get a great price (youth is up there with health), but the fact is, life is nothing if not unpredictable. If you are married, and especially if you have children, your situation is actually prime; the phrase “while we’re young” couldn’t be more applicable.
Now that you have the facts of life insurance, you may be left with one final question: Where do I begin? As always, the answer is right here. Our insurance experts can guide you through every step of the way. After all, here at The Dowd Agencies, life’s just-in-cases are the cases that matter most.