3 Myths That Keep People from Buying Life Insurance
Myth # 1: It’s too expensive
Perhaps one of the most common objections people have when it comes to buying life insurance is the cost. I think perspective is necessary when considering the cost of anything so let’s start with the cost of life insurance compared to other purchases. We know that a healthy individual age 35 could obtain $250,000 of 20 year term life insurance for under $20 per month while the average cell phone bill ranges $50-%60 per month, $120 per month for cable, and the average American family spends $225 per month on eating out each month.
I’m not saying those other expenses aren’t justified, but what I am saying is that the life insurance proceeds make sure all the other bills get paid if tragedy strikes. The cost of life insurance is the cost of saving your family from financial ruin in the event of your premature death. Can you really put a price tag on that kind of protection?
Myth # 2: I have life insurance through my employer
Employer sponsored life insurance is a wonderful benefit that helps countless families each year. For many people however this coverage just isn’t enough. It’s common for these plans to be just enough to cover a burial costs and not much else. If you have a family who depends on your paycheck for housing, food and education, how far will a $25,000 work provided life insurance policy take them?
Occasionally employer plans will be equal to the employee’s salary or in rarer circumstances a multiple of their salary. This is fantastic and often costs the employee little to nothing to participate in. Nonetheless it is called supplemental insurance for a reason, meaning it should be a supplement to your individual plan that you own outside of work. Even a multiple of your salary often isn’t enough protection for what your loved ones need, and taking your policy with you upon separation from your employer can be expensive or even impossible.
Myth # 3: My non-working spouse does not need life insurance
Non-working spouses who take care of children and household chores definitely need life insurance coverage on their lives. A survey of stay at home moms asking them to provide information on their tasks and how much time they spend on them allowed experts to estimate the free market value of their hard work. It’s been estimated that a stay at home mom is worth a salary of around $115,000 per year!
For a working spouse putting in full-time hours at the office, the loss of a non-working spouse would be economically devastating. Daycare alone costs $12,000 per year per child on average and we’re not even talking about cooking, cleaning, driving kids around, and maintaining the family budget. Just because a non-working spouse isn’t earning a paycheck doesn’t mean they don’t provide a tremendous amount of economic value to the household.