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Five Myths about Life Insurance

If you are one of those who tries to avoid all discussions surrounding life insurance and try your best not to approach or deal with insurance agents, then you are not in the minority. Most people avoid what they consider is unpleasant and since life insurance deals with income after death, we do not like to face our mortality and think of the time when our family will need financial security and perhaps require a life insurance policy, especially if there is no other form of savings.

However unpleasant the topic maybe, as the head of the family, we have to accept the fact that life is short and discuss the topic of life insurance soon lest we regret it later on in life. When the salary of the family head stops because of his sudden death or critical illness, life insurance provides the much needed financial security. Here we will discuss five misconceptions that need to be cleared so that we can understand these policies better.

Myth 1. If you have a people who are financially dependent on you, only then do you need life insurance. The main reason why people take a life insurance policy is to pay for the financial security of those they take care of – usually children and wife / husband. Are heads of families the only ones who take insurance? No. A person who does not have a family can also take life insurance for various reasons. It could be to take care of aged parents if the policyholder dies young, it could be for the protection of employees if the holder owns a small business or it could be to settle debts, like a home mortgage, when the holder is still alive.

Myth 2. “My employer informs me that I already have life insurance with the company, I’m sure that that is enough”. State laws require employers to insure their personnel and to indemnify loss of a life of the personnel if the death is work related. While it is true that you are covered, employers will usually get the cheap term life insurance quotes which may not be enough to cover for the needs of your family in the event of your death. Also, company-sponsored life insurance policies are only effective during your employment with the company. Once you leave the company for any reason, your life insurance will also be terminated.

Myth 3. “I am young and only need to think of insurance when I am old”. This is one of the greatest misconceptions that need to be busted. It is true that life insurance is available for people of all ages. However, have you seen the cost of insurance as a person gets older? Only if you get life insurance quotes when you are young can you save money for they will be cheaper. When calculating insurability, underwriters give top priority to age and health condition. A younger person is by default healthier and expected to live longer than an older person. Hence, when you compare term life insurance quotes, you will find that it is affordable for younger people that older folks.

Myth 4. It does not matter which type of policy you choose. This is the wrong approach for there are so many different plans on offer and each is different from the other in so many ways. For example, permanent life is more expensive than term life but also offers a savings component. First consider the future financial requirements of your family, your current financial status and then choose a plan based on these needs. In this way you will not go wrong but make an informed choice.

Myth 5. I am busy and getting a life insurance policy will take up too much of my time. If you have a computer and Internet connection either at home or office, you can quickly bust this misconception about insurance policies. Before these technologies were made available, it is true that getting insurance was an extensive process. You had to fill many forms and wait for the underwriter to study your full medical report. After several weeks, you will get to know if you are eligible for coverage or not. These days however, you can request a life insurance online quote, complete all the formalities and receive approval and coverage within a few minutes or hours at the most.

Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on whole life vs term insurance and cheap term life insurance quotes“, visit his site today.

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