There are many reasons people use to NOT buy life insurance.
If you are at that point of thinking about the purchase, take a quick glance at the objections we hear most often.
Myth #1 – Life insurance is too expensive
According to the 2022 Life Insurance Barameter study done by LIMRA, about 50% of people overestimate the cost of life insurance as much as 300% more than it actually is. One thing we know for sure is life insurance is at its most affordable today.
A healthy 35-year-old can purchase $700,000 of 10 year term and cost between $17 – $29 per month depending on gender and health. That is far less than 1% of an annual income for most people. And you can quote, customize, and buy in 10 minutes or less!
Myth #2 – I can’t afford life insurance
In the previous example, you could save $40 or more by simply not having two or three meals delivered to your home. Oh, and not to mention the cup of coffee example… how much do you pay every morning for that?
If that’s not enough convincing enough, a 35yr old can buy $500,000 of 10 yr term insurance for $23 per month or less which is 1% of income for someone making $27,600 per year. If you make more than $27,600 and you’re 35 year old, it means this payment is less than 1% of your income. Using our affordability model of staying between 1% – 2% of your income for basic life insurance costs is a good gauge on what you can afford.
Myth #3 – There’s no point in getting it if you’re already in good health
The fact is that no one plans on bad things happening, but we know that bad things do happen. Remember, life insurance is for your beneficiaries not for you. What kind of choices do you want to provide your family if the unexpected were to happen? Do they have enough savings to provide the ability to make smart choices during stressful times?
Being in great health is actually the best situation to be in when buying life insurance. The better your health and the younger you are means your life insurance rates are likely to be as low as they ever will be in your life!
Myth #4 – I don’t need it, I can get life insurance through work.
While a nice benefit, it’s not guaranteed. Some companies have canceled their insurance programs. Or, what about if you leave the company?
Many companies benefits package will not allow you to take life insurance with you, and if they do it is often very unaffordable to keep it.
Read the fine print in your benefits plan before deciding to put all your insurance eggs in only your employer’s basket.
It’s a risky move considering the statistics are clear that you will not retire from the current company you’re working for today. According to the bureau of labor and statistics those age 35-44 will have 2.9 careers before they turn age 45! We suggest owning what you can on your own so your family or loved ones aren’t left without coverage should the worst happen.
Myth #5 – I stay home to care for my children (so, I don’t have income to replace).
The key point here is how will things be different when you’re not there? According to an Investopedia post, the value of a stay-at-home parent is equivalent to more than $178,000 of annual income, especially true because parenting doesn’t have 9-5 hours.
Think about it, if you weren’t here; Will your children have to go to daycare? Will you have help at home preparing meals? What about grocery shopping? Do you have rides to sporting events or after-school events?
And, what about the cost of education?
Term insurance, while you and your kids are young, is a great way to provide the coverage necessary to ensure nothing else changes when you’re gone.
And, it’s very cost-effective (Most likely costs less than half of what you’re thinking).
Myth #6 – I am too young to buy life insurance.
You’re never too young to have life insurance as it’s a tool that can become more useful as your life and income matures.
The smartest time to buy life insurance is when it is less expensive than when you are older and the you can qualify for higher multiples of your income. We would suggest buying as much as you can qualify for and afford while you are young. You can always make changes to your plan later in life.
Many of our younger customers buy a term policy that can be converted into some type of permanent insurance such as whole life, or use Return of Premium riders so they can get their money back when the term period is up.