Life Insurance: everyone’s heard the words, but not everyone knows the facts. There are probably some things you’ve heard about life insurance that may be holding you back from purchasing a policy. We’re here to help separate the facts from the myths to give you a better idea of who needs life insurance and what you can expect from it.
Read the following statements and decide which are myths about life insurance and which are facts.
Statement #1: If you don’t have kids, you don’t need life insurance.
Myth:
Even without children, your final expenses can really add up. This could be things like your funeral, medical expenses, and any debts you might leave behind (student loans, credit card debt, or a mortgage). Life insurance is about easing the financial burdens for your loved ones in the event of your death. It’s important to consider purchasing life insurance even if children are not yet in the picture. In addition, if you purchase insurance while you’re young and in good health, you can generally purchase it at a lower rate than you could later in life.
Statement #2: Only a wage earner needs to purchase life insurance.
Myth:
Stay-at-home spouses play an important role in a family and should also consider coverage. Their full-time job of providing childcare, making healthy meals, driving kids to school and other day-to-day tasks are important to a family. Without them, the costs of caring for a family could really add up. Life insurance can be important whether you bring home the paycheck or keep the children and household running smoothly.
Statement #3: My beneficiaries receive life insurance benefits income tax free.
Fact:
This is an often-overlooked feature of life insurance. Generally speaking, your beneficiary, whether it’s your spouse, children, or another individual, will receive your death benefit income tax-free. That means more of your money will go toward protecting those you love.
Statement #4: Coverage provided by employers is sufficient.
Myth:
Not always. If your employer offers group life insurance, it’s often for only 1-2 times your annual income. This amount, especially for those with children, may not be enough. Be sure to review your employer’s policy. You can always add to your coverage by purchasing an individual policy as well.
Statement #5: If you lose your job, you lose your life insurance coverage through your employer.
Fact:
If you lose your job or decide to change jobs, your coverage will not follow you. Having an individual policy to supplement your group life insurance policy from your employer ensures that no matter where your career path takes you, you’ll be covered.
Statement #6: Life insurance is too expensive.
Myth:
It’s probably less expensive than you think. In fact, a 35 year-old, nonsmoking female in good health could get a policy for only $11.20 per month (for a 20-year-term and $75,000 death benefit). It’s generally a small price to pay for the financial protection you’re providing for your family.
Now, get your life insurance questions answered.
What IS life insurance?
Very basically, life insurance is similar to other types of insurance (car, home, and health for example) in that it protects you in case something unexpected happens—in this case, it would be your death. In exchange, you pay a monthly premium (meaning a monthly payment). Should you die, your loved ones would receive a benefit to help them deal with financial uncertainties.
The amount of life insurance you have can greatly impact those you leave behind. Of widows and widowers whose spouses died prematurely (between the ages of 30 and 55), only a quarter felt their spouses had adequate coverage (LearnVest). Life insurance provides a way to cover your financial obligations so you can protect your loved ones.
What’s the difference between term life insurance and whole life?
Term life insurance means that you pay a fixed premium (or monthly amount) for a predetermined amount of time—in this case, 20 years. You are fully covered for that time period but must re-apply for continued coverage once that term is complete.
Whole life insurance means that you are covered for your entire lifetime without the need for renewal but will have a higher fixed premium.
What does brightpeak offer?
brightpeak offers term life insurance. We chose to offer you term life insurance because it is simple and affordable. You pay a fixed monthly premium that prepares you and your family for the unexpected. We want you to be able to protect the ones you love in the future without sacrificing their present needs.
How do I know if I’m eligible for life insurance?
With brightpeak, you are eligible for life insurance if you are between the ages of 18-65, are a U.S citizen or green card holder, and identify as Christian. You must also be a resident of CO, GA, IA, IL, IN, MI, MN, NE, NV, OH, PA, TN, WA, or WI. You’ll need to answer some questions about your health history to finalize your eligibility.
What can the life insurance benefit cover?
Your loved ones can use the benefit for both their immediate and long-term expenses. The immediate expenses might include funeral costs, estate settlement costs, medical bills, and outstanding personal debts. Long-term expenses for your loved ones might include living expenses, mortgage payments, or school and college tuition costs for your children.
How much life insurance do I need?
How much insurance you need depends completely on your personal situation. To help you get an idea of what that might mean for you, think about your obligations: do you want your insurance to cover only the immediate costs for your loved ones, or do you want to cover more of the long-term costs they might face? Decide what your priorities are (along with what you will comfortably be able to afford) and use that as a starting point.
Written by John Mulloy
This blog post is from the Author's perspective and doesn't speak for brightpeak financial. Contact brightpeak if you want to know more about brightpeak products, and keep in mind that they are not available in all states and there are some limitations (some exclusions and restrictions may apply).
