Numerous myths around life insurance can easily discourage you from protecting yourself and your loved ones from any eventualities, such as death. It’s important to expand your knowledge on this particular insurance topic to enlighten yourself and inspire the next best decision in your life.
In simple terms, a life insurance cover is a contract between an underwriter or insurer and the policyholder. It aims to fill the gap left behind by the policyholder’s demise and provide a soft landing for the beneficiaries listed in the insurance package.
Furthermore, the life insurance policy has two subcategories (term and permanent) that need clarification before signing any contract with your insurer.
Term life insurance is limited by time and can be discontinued once the period expires, and the sum is assured if fully settled by the insurance company. Conversely, permanent life insurance guarantees payments awarded to the beneficiaries as listed at the beginning of your cover contract.
Understanding the two subcategories can help you make the right move when purchasing a life insurance cover. Also, it mutes the hearsays and life insurance myths about getting cover for yourself.
Read on to learn why you should ignore the misconceptions and invest your money in life insurance.
- Investment In Your Future
At the core of life insurance is the guarantee that your loved ones will have a smooth transition in case of your death. It carries the financial responsibilities you’ve been dealing with to ensure that their needs are consistently met.
When you invest in such a cover, you promise your kin a future that’s free of debts, like funeral overheads and other expenses. It can work as a source of income to continuously support the lifestyle you’ve established for them.
Life insurance myths can be deceiving and may trick you into living carelessly, leaving your loved ones in despair if and when you pass away. Therefore, buying such life covers can be equated with investing in your future.
- Age, Which Is Just A Number
Investing in life insurance doesn’t have age limits attached to packers offered by underwriters. Starting from where you are, it gives you the confidence to face life’s challenges head on, knowing that your loved ones are covered.
Your service provider can calculate and explain the benefits of signing the insurance contract. That way, you know how much your beneficiaries can get in the compensation process.
Moreover, the packages earn interest as you contribute and supplement future expenses for your kin. You need to ensure consistent remittance of premiums to multiply the initial investment.
Irrespective of your age, gender, or income, it’s never too late to buy insurance covers. Entertaining myths can mislead you to think life insurance is designed for older people. Reach out to your insurance broker to get the correct information.
- Freedom From Social Status
The myth that ‘only married people qualify for life insurance’ is misplaced and lost in translation. Even if you’re single, you can still purchase the policy for your own good. It’s important to understand that you’re expected to declare beneficiaries, like your spouse and kids, when signing the insurance contract if you’re married.
However, if you’re single, the underwriter can guide you through the application process and ensure you get the right contract. The life insurance policy disregards social status and can accommodate married and unmarried or single applicants.
Living expenses, funeral costs, student loans, credit card debts, and health-related issues cut across the divide. Your package can cater to such overheads in your absence.
- Health Surveillance
Normally, insurance companies research to analyze the risks in your undertaking. It includes getting your medical tests or examinations and reports to establish your health status. That way, the insurer can advise the package for you to purchase.
Also, they use your health status to estimate the expenses related to the hospital visits and bills. Getting to learn your health condition and the risks you’re facing is basic application processes that must be adhered to by insurance companies.
Health issues are challenges that anyone can encounter at any time. You need assurance that your bills or expenses can be paid in full.
- Collateral In Financial Security
The premiums you pay to service your life insurance cover equally as savings in your bank account. It can be used to evaluate your asset base when applying for other financial facilities like loans.
The notion sold by life insurance myths tends to discourage you from investing your money in the policy contract. Therefore, you need to consult with your insurer for the best package to add to your portfolio. This can save you the headache of proving your financial capability to pay off debts.
- Tax Avoidance
Life insurance is directly connected to taxes and can help you avoid paying extra money when filing your returns. Your monthly remittance can accrue interest and remain untaxed for the policy’s lifespan.
However, you’ll be liable to pay tax whenever you decide to cancel, stop making payments, and withdraw funds from your life insurance cover. You need to decide the life insurance subcategory you wish to undertake.
- Adjustable Coverage
You may have planned to safeguard the future of yourself and your loved ones by buying a life insurance cover. Still, underlying medical conditions, like renal failure or stroke, can distort the order of things. A life insurance cover can help you maintain your medical condition by paying for medication while still guaranteeing your loved ones a stress-free future.
In addition, you stand to benefit from accelerated awards from your package to ensure you enjoy the remaining time as prescribed by your physician. The accelerated incentives are awards in your life insurance contract to get 20 to 100% of your principal amount.
Furthermore, you can add the number of beneficiaries as your family grows without signing a new contract. That way, everyone listed when applying benefits from the policy can claim compensation when it’s due. Though, you’ll have to adjust the amount you’re remitting for your premium package.
- Multiple Protection
Life is a risk, and you need to calculate every move you make. Investing in life insurance takes away fear or worry about what happens to your family if you die. Your kin can inherit your policy benefits and enjoy the lifestyle they’re entitled to live.
Unlike other insurance covers, life insurance offers options to choose from, depending on your life situation. You could be looking to invest in both term and life insurance to take care of your different needs, like college fees or medical bills.
It’s a binding treaty between you and your insurer. The terms of the agreement have to be fulfilled as captured in the clauses of the policy.
- Multiple Benefits
Life insurance myths ignore the underlying benefits outlined in the policy by making it look like a Ponzi scheme. Daily activities that contribute to your livelihood have demands that need to be met.
Having a life insurance policy can help navigate other sectors of the economy to improve social well-being. For instance, the policy has ties with education, health, and finances to allow you access to services without worrying about the bills. You’re even entitled to exemptions simply because you’re insured against various risks.
- Manageable Payment Plan
Life insurance takes a small percentage from your pocket to cover various activities. Begin by evaluating your lifestyle and what you need to support yourself financially. Look at various prospectus and brochures available at the insurance companies before buying any policy.
For instance, if your annual earning is $100,000, you can pay $2,000 annually for your policy. If your insurer allows monthly installments for your life insurance, it’s a small amount.
In addition, you can place a standing order in your bank to make payments for your life insurance policy. It automates your premium remittance collection to enable you to focus on other important matters.
- Backup For Other Insurance Covers
Buying a life insurance cover is equivalent to saving for a rainy day. Other insurance policies, like car insurance might fail to honor their part or change with time, but the life policies can stand in to help you bounce back.
Other insurance policies can be incorporated into the life insurance cover, depending on your insurer. It encourages you to take multiple policies, like a car, a home, and a business, from one insurance company that can land you great deals on insurance packages.
- Straightforward Contract
There are no unclear or hidden clauses and changes in life insurance cover as myths might sell. Your insurance company is responsible for educating you on what the policy covers are and to what extent.
You can seek clarification on any part of the contract before signing. This will help you understand straightforward terms.
Conclusion
Life insurance myths are uninformed and can confuse you when buying a policy. You need to learn how the insurance ecosystem works to make the best decision. The benefits attached to life insurance surpass other insurance policies and have longevity at the foundation. It’s important to be objective when looking to secure a future for yourself and your loved ones. Ignore the life insurance myths and avail of one now.