Four Myths That May Leave Your Family Unprotected

380news - December 14, 2017 - Home & Garden - Leave a comment



When you’re just starting out, it often seems that a dollar never stretches far enough. And with new commitments, such as buying your first home or having children, comes the responsibility to make sure your loved ones will be provided for financially, no matter what life may bring. If you were to die unexpectedly, life insurance is there to make sure your loved ones can maintain their standard of living, stay in your home, send your kids to the same schools and keep their plans for the future on track. It also gives the grieving spouse or partner time to make decisions, or in some cases find work outside the home, without worrying about finances. But common misconceptions often prevent young families from purchasing the life insurance they need.

Myth 1: I only need life insurance if I’m the primary breadwinner in my family. Whether you bring home the largest paycheck in your household or a smaller one, your family relies on your income to maintain its quality of life, and it would be missed if something were to happen to you. Even if you don’t work outside of the home, having life insurance is a smart choice. Stay-at-home parents perform valuable services such as childcare, cooking, housecleaning and household management, which can be costly to replace for a surviving spouse or partner.

Myth 2: If I buy a term life insurance policy and find that I still need protection when the term ends, I can always renew the policy. Term policies are quite popular with many young families, and for good reason: They typically offer the greatest coverage for the lowest cost. Term insurance provides protection for a specific period of time (the “term”), and can be ideal for people who feel they have financial needs to cover that will disappear over time, such as a mortgage or a child’s education. However, many families realize that even after the kids are grown and the mortgage is paid off, their need for insurance continues—to provide income for a surviving spouse, eliminate debts, pay taxes, etc. Because life insurance premiums increase with age, renewing your policy when the term expires can be very expensive. Moreover, poor health may make renewal impossible.

Myth 3: I only need term life insurance. Term life insurance makes sense for many young families because their need for coverage is great and their budgets are often limited. But that doesn’t mean it’s the only type of insurance you should consider. Permanent life insurance policies provide a death benefit as well as other unique features such as lifelong protection and the ability to accumulate cash values on a tax-deferred basis, similar to assets in most retirement/savings plans. You can access the cash values for important uses like a child’s education or a business opportunity. (Keep in mind, however, that withdrawing or borrowing funds from your policy will reduce its cash value and death benefit if not repaid.)

Myth 4: I have coverage through work and don’t need separate life insurance. Group term coverage offered by your employer is a great option, as there are no exams needed and the whole family can be covered for one low cost. BUT! What happens if you change jobs? Not all companies offer group life insurance. What if you lose your job? Cobra payments are expensive and hard to make if you are unemployed for any length of time. Term and permanent life insurance policies are more affordable today than they will be tomorrow. Get em` while you’re young I always say.

It’s never too early to start planning for your future. If any of this sounds daunting, just know that it doesn’t have to be. You can start by talking things through with my office—at no cost. We will help you figure out how much you may need, and also find a policy that fits into your budget. Call us today at 469-5257407 to speak with me or visit our office at 202 South Coleman street suite 200 in Prosper, TX 75078.



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