Seven common misconceptions may prevent consumers from purchasing
coverage.
COLUMBIA, S.C.--(BUSINESS WIRE)--
Three in 10 American households have no life insurance at all, and even
those with life insurance coverage usually don’t have enough.1
The reason? Besides the fact that most people don’t want to think or
talk about needing life insurance in the first place, many simply don’t
understand how much coverage they need — or the potentially devastating
effects of inadequate coverage.
“Many misconceptions persist about life insurance, including who needs
it and how much it costs,” says Steven Johnson, assistant vice
president, product development, at Colonial Life. “Learning to spot some
of the myths about life insurance can help consumers make better choices
that will protect themselves and their families.”
Seven common life insurance myths
Myth #1: My employer
pays for my life insurance so I don’t have to worry about it.
Truth:
If your employer is paying for your life insurance coverage, it’s
almost certainly a group policy that only covers you while you’re
employed there. In fact, only 44 percent of adult Americans have
individual life insurance.2 Without individual life
insurance, you could be vulnerable if you lose your job or have a break
in employment. “Individual voluntary life insurance purchased at the
workplace is a good solution for many employees,” explains Johnson.
“Individual plans are portable, allowing policyholders to keep their
coverage if they change jobs or retire.”
Myth #2: I already have enough life insurance.
Truth:
A general rule of thumb is to purchase a life insurance policy worth
seven to 10 times a person’s income. Yet today, most households only own
enough life insurance, on average, to replace their income for 3.5 years.3
Myth #3:I can’t afford life insurance.
Truth:
Misunderstanding about cost is one of the biggest barriers to purchasing
life insurance, according to LIMRA. Consumers estimated the cost of a
life insurance policy to be more than double its actual cost in a 2012
survey.4
“Many types of life insurance are available to meet different needs and
budgets,” says Johnson. “Term life plans, which are generally less
expensive than other types of permanent life insurance, can be purchased
for just a few dollars a pay period. A little life insurance is better
than none at all.”
Myth #4: I’m single so I don’t need life insurance.
Truth:
Even if no one else depends on their income, single individuals are
still likely to leave behind bills, credit card balances and final
expenses such as funeral costs. These expenses could become an
unnecessary burden on parents or siblings at a difficult time.
Myth #5: My spouse doesn’t work outside of the home, so I don’t need
life insurance for him or her.
Truth: Nonworking spouses
certainly have a need for life insurance when one considers the many
contributions they make to the household, such as child care, laundry,
cooking, shopping, cleaning, home maintenance, transportation and
errands. Families should ask themselves, “How would I maintain our
household if no one was available to take care of these activities?”
Adequate life insurance for a nonworking spouse can provide the income
needed to protect a family’s way of life.
Myth #6: There’s no need to buy life insurance for my children.
Truth:
Children who die prematurely still leave behind final expenses, such as
medical bills and funeral costs. And buying and keeping coverage for
children while they’re young protects their insurability if they develop
a health condition later in life that could make it more expensive or
impossible to get coverage.
Myth #7: I’m healthy — I can worry about life insurance when I get
older.
Truth: The cost of buying life insurance
increases with age. Buying a policy when you’re young and healthy means
you’ll already have the coverage you need if you develop a health
condition later that could make you uninsurable.
“People don’t like to think about their own death or a family member
dying,” says Johnson. “But we also hate to think about leaving our loved
ones to deal with financial problems at an already difficult time.
Taking time to review your life insurance needs and coverage is one of
the smartest things you can do to protect yourself and your family.”
For more information about voluntary group or individual life insurance
from Colonial Life, call (803) 678-6599 or visit www.ColonialLife.com.
Pre-existing exclusions and limitations will apply. Benefits vary by
state and may not be available in all states.
About Colonial Life
Colonial Life & Accident Insurance Company is a market leader in
providing financial protection benefits through the workplace, including
disability, life, accident, cancer, critical illness and supplemental
health insurance. The company’s benefit services and education,
innovative enrollment technology and personal service support more than
79,000 businesses and organizations, representing more than 3 million
working Americans and their families. For more information visit www.coloniallife.com
or connect with Colonial Life at www.facebook.com/coloniallifebenefits,
www.twitter.com/coloniallife
and www.linkedin.com/company/colonial-life.
1 Trillion Dollar Baby – Growing Up: The Sales Potential of
the U.S. Underinsured Life Insurance Market, LIMRA, 2010.
2 Facts About Life 2013, 2013 Life Insurance Awareness Month,
LIMRA.
3 Facts About Life 2013, 2013 Life Insurance Awareness Month,
LIMRA.
4 2013 Insurance Barometer Study, LIMRA, 2013.
Colonial Life & Accident Insurance Company
Jeanna Moffett,
803-678-5445
JMoffett@ColonialLife.com
Source: Colonial Life & Accident Insurance Company