Options if you have a pre-existing health condition
Life insurance is one of those topics that lends itself to misconceptions. You've probably thought about it before, but maybe you think life insurance isn't for you — or now isn't the right time to make this important decision.
But when it comes to life insurance, a variety of policies address different goals, so there is no better time than the present. Finding the policy that's right for you can be complex, so it's natural if you have questions and concerns.
In fact, there are a few common misconceptions that often hold people back from making this important decision to purchase life insurance.
Myth: Life insurance is too expensive
Reality: Many people think life insurance is cost-prohibitive — but life insurance is likely more affordable than you think, with policies that can average around $40 to $55 per month. And it's worth noting that the older you get, the more expensive it becomes. So, it's likely in your financial best interest to purchase life insurance sooner rather than later.
Myth: I don’t need life insurance right now
Reality: When you're young and healthy, it's easy to think that life insurance is a problem for another day. But life insurance is actually there to protect those who depend on you if the unexpected happens — whether that's tomorrow or decades from now.
Accidents are the leading cause of death in adults up to age 44, and life insurance can help provide a safety net for your family in the event of this worst-case scenario. If you're single and don't have any dependents, you may also think life insurance is unnecessary at this stage in your life. But it pays to think of your future self and your potential needs. A partner and/or children may not be in your picture now but locking in a low rate on insurance today helps provide security down the road in life — wherever that takes you.
It's likely in your financial best interest to purchase life insurance sooner rather than later.
Myth: My life insurance policy through my employer is enough
Reality: While you should definitely take advantage of the policy your employer provides, typical life insurance offered through the workplace covers about one to two times your annual salary or caps out at a low fixed amount. Depending on your situation, experts may recommend a policy worth at least 10 times your annual salary or even more.
Myth: My health makes me uninsurable
Reality: Contrary to popular belief, a serious or chronic health condition, does not necessarily preclude you from getting life insurance. And one in two Americans have a pre-existing condition, so you're in good company.
While an underlying condition may mean higher premiums, you most likely still have options. Some types of life insurance policies do not require a medical exam, and guaranteed issue life insurance might be a good option for seniors between the ages of 50 to 80 as well as those who do not qualify for traditional policies because of a serious medical condition or terminal illness.
Myth: Life insurance is a waste of money — I should invest instead
Reality: Like other types of insurance, life insurance only pays out if a claim is filed. But that doesn't mean the money you spend on premiums is a waste. Life insurance is a safeguard to help protect your beneficiaries in the event of your unexpected death. In the best-case scenario, you never need to use your life insurance, but the security and peace of mind it provides in the event of unforeseen circumstances is invaluable during its term.
It's true that whole life insurance does not provide large investment returns compared to other investment vehicles, like retirement accounts. However, life insurance shouldn't be thought of as an investment, it should be seen instead as a critical financial security measure.
Use facts — not fiction — to inform your view of life insurance
Now that we've separated myths from reality, you're ready to make an informed decision about life insurance that's right for you and your loved ones. Planning ahead and staying ahead of misinformation will ensure they're looked after today and in the future.
Disclosures: Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers – for further details see www.ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.