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Six myths about life insurance
Don't let these misconceptions prevent you from carrying the insurance coverage you need
Chances are that you already understand the value of life insurance. If you or a loved one dies, life insurance can help pay off final expenses and debts, provide a steady income for a period of time, or fund college tuition, for example. Yet only six in 10 Americans have life insurance*, according to the insurance and financial products company LIMRA.
In its continuing effort to promote awareness of the importance of life insurance, NEA Member Benefits would like to debunk six common myths about life insurance coverage:
1. Only breadwinners need life insurance. If you’re not the main wage earner in your family, you might think you don’t need coverage. Think again. Even if you’re not the breadwinner, you still earn valuable income or provide services to your household. Stay-at-home parents perform tasks that would either need to be supplemented or replaced. The breadwinner might need to work less or take a different job while the family adjusts to a one-parent household.
2. Investing my money is a smarter move than buying life insurance. If you have $1 million in liquid assets, you might not need life insurance. Relying solely on your investments can be risky, however, especially if you have children or a spouse who depends on your income.
3. You don’t need more coverage than your employer provides. Many employers provide a great free or low-cost supplement. But these policies may not provide enough coverage in most situations.
4. I don’t need life insurance if I don’t have dependents. Funeral expenses, medical bills and debts are transferred to the next of kin upon a person’s death. Having coverage protects your legacy by helping to ensure that you don’t leave a financial burden for your loved ones.
5. Life insurance is expensive. Many people overestimate the cost of life insurance. When you’re researching what kind of policy to purchase, think about why you need the coverage and what the money would replace. Depending on your answers, a lower-cost plan that carries minimal coverage might be ideal for you. Compare quotes to ensure that you’re getting the best deal. Keep in mind that the buying power of large groups such as the National Education Association can help make coverage more affordable.
6. I’m healthy. I don’t need life insurance. The best time to buy life insurance is when you are young and healthy. Premiums only increase as you age and have more health problems. Even if you are healthy today, you don’t know when the unexpected, such as a car crash, could happen.
Keep in mind that all insurance is not alike. A financially sound company will more likely be there to pay claims when needed. Visit mtabenefits.com to view the insurance programs offered by the NEA Members Insurance Trust and learn more about this coverage, which is designed with NEA members and their families in mind.
* Source: http://www.limra.com/uploadedFiles/limra.com/LIMRA_Root/Posts/PR/_Media/PDFs/2015-LIAM-Fact-Sheet.pdf, LIMRA website, 2015.
Life Insurance coverage is issued by The Prudential Insurance Company of America, Newark, N.J.