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- Many young people believe they don’t require life insurance because they are healthy and don’t have children.
- But if you have debt — like private student loans — life insurance is necessary.
- It is also important to share your finances with stay-at-home parents or couples.
After I married my husband last year, my financial to-do lists grew quickly. We found ourselves struggling to decide how to combine our money and which joint investments to make.
The topic of life insurance came up. We were unsure if we really needed it and whether it was worth paying monthly.
Although we are still in the decision-making stage, I have started to learn about Life insurance policiesand all the divergent opinions.
So I asked financial planners to help me dispel the most common myths surrounding life insurance.
Myth: Life insurance is not necessary if you are young and in good health
My husband and I are both young and in good health, so we have put off getting our life insurance. But financial planner Andrew RosenThis type of mentality can prevent you from properly planning.
Rosen emphasizes that no one knows their future. Your health and wealth can change quickly. Life insurance can help you build your wealth right away.
Many people aren’t aware that life insurance is not only for death benefits. cash valueRosen says that this is often associated with certain forms of life insurance.”
Rosen says that even though you’re young, healthy and active, it’s still a good idea to talk with a financial professional about your options. Rosen believes that life insurance can help your reach your financial goals.
Myth: Stay-at-home parents don’t need life insurance
My partner and I both work full-time at the moment, but it isn’t clear how this could change once children are added to the mix. We wondered if we needed to both get policies in order to protect ourselves from losing our jobs later.
Financial advisor Jason SipersteinLife insurance is important regardless of your income or job status.
Siperstein states, “Even if a spouse is no longer able to care for their children, the cost of replacing them or any other household chores could be very costly and even financially catastrophic if they are not prepared accordingly.”
Myth: If I’m single, then I don’t have to get life insurance
My husband and I talk with our friends about life insurance. Some of them are opposed to it simply because they are single.
But financial planner Kevin DraegerIt is recommended that single people consider life insurance even if they are not married. This is because you could be left with debts such as student loans, car loans, mortgages, credit cards, and private student loans.
Draeger states that a life insurance policy could help pay for your final expenses as well and cover any outstanding debts.
Myth: The life insurance policy of my employer is sufficient
Although I’m self-employed, I do not have the option to purchase a company policy for life insurance, some people have.
Draeger stated that life insurance policies provided by employers are a great benefit but may not be enough to provide for your loved ones in the event you pass away.
Draeger says that while many companies offer up to three times the base salary of an employee, it may not be sufficient to cover final expenses, outstanding loans, or loss of future income for your loved ones.
Draeger recommends that you examine other aspects of an employer policy. Employer policies are not guaranteed. Life insurance benefits could be removed if the company experiences financial difficulties.
Draeger says you can’t usually take the benefit of leaving the company to your next job.
Myth: Life insurance can be too costly
My husband and I decided to reduce our expenses after we got married to help us reach other financial goals. As a major expense, we thought of getting life insurance.
Draeger warns that life insurance is not as affordable as it was today.
Draeger says that rates are usually lower when you’re younger and healthier.Some types of life insuranceProvide living benefits as well as a death benefit. These policies can provide cash value that is able to be borrowed from. The money in a life insurance policy generally will Increase tax-deferred.”
