Know the Truth About Life Insurance

Life insurance provides financial protection for loved ones should the policyholder die. And while purchasing life insurance is one of the best decisions you can make, there are plenty of myths out there about the coverage. Here we break down some of the top myths and tell you what the realty is.

Myth:

I am a stay-at-home spouse, my family doesn't need life insurance on me.

Reality:

Stay-at-home parents provide a lot of valuable services that are necessary to the success of a family. If your spouse works full time, and you manage the household, will they need someone to clean, cook, take care of and chauffeur the kids? Insurance can provide funds to allow the working spouse to take time off and pay for help with household tasks.

Myth: 

My life insurance through work is sufficient.

Reality: 

Everyone’s needs are different. Your life insurance at work may be enough, but it’s worth taking time to make sure. In order to determine your needs, it helps to understand how much your family depends on you financially and consider the expenses involved with end of life medical bills and burial. 

Myth: 

I will get a better deal purchasing life insurance online.

Reality: 

While the Internet provides good information, it is not necessarily cheaper. You will likely pay the same in premiums if you use an agent or purchase a policy online. An agent can help you figure out how much insurance you need and assist you with the application and help you understand the terms of the policy. 

Myth: 

I can only have on beneficiary.

Reality: 

You can have many beneficiaries. You simply need to note what percentage of your death benefits go to each. Experts advise that you consider setting up a trust or estate for minor(s) since insurance companies will not pay minors. 

Myth: 

All cash value policies are the same.

Reality: 

In some cash value policies, the values are low in the early years but build later. In other policies the values build up gradually. Ask your insurance advisor for an illustration showing future values and benefits. Most term policies do not have cash value. 

Learn more at doi.sc.gov/life and from the NAIC's Consumer Resource Center.