As a 20- or 30-something, you’ve got a lot of financial responsibilities, so life insurance may not be a top priority. You may have just gotten married, purchased your first home, or had your first kid. Where are you going to get the money to invest into a life insurance plan?
Well, with all of your new responsibilities (and there will be plenty more to come), there’s no better time to look into life insurance. You need to make sure your loved ones are provided for no matter what happens. If you haven’t considered life insurance yet, do it now. First, though, here are three misconceptions that hurt many young families when they go to buy their first insurance plan.
Three Life Insurance Myths
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You only need a life insurance plan if you are the primary breadwinner in your family.
It doesn’t matter if you bring home the largest paycheck or the smallest one. If you’re making money for your family, your income will be missed if something were to happen to you. Even if you aren’t employed outside of the home, but perform valuable services like childcare and household management, you should still look into life insurance. Hiring help to take over those important tasks can be costly for a surviving spouse, so make sure your family is covered in the event of your death — no matter how big or small your role may seem.
When your term life insurance policy ends, you can just renew the same policy.
By definition, a term life insurance policy provides protection for a set period of time. Unfortunately, once that term is up, you’ll need to reapply for a new policy, and life insurance premiums always increase with age. So, renewing your policy can become extremely expensive, which brings us to our next misconception.
You only need to consider term life insurance plans.
Term life insurance makes sense for families whose financial responsibilities for others will disappear over time. For instance, once your child is an adult with a full-time job, he or she will no longer rely on you for financial stability. That means that in the event of your death, they will not lose a portion of their income. However, as mentioned above, term life insurance plans end, and since you will be older at that point, getting a new policy will come with new (and higher) premiums. That is why many people are encouraged to look into permanent life insurance policies.
As you start a family and become responsible for others, making sure that they are always provided for should be a top priority. The best way to do this is by investing in a life insurance policy. Remember, if you have any questions, concerns, or reservations, you can always consult an experienced insurance agent or adviser.
