Look past these life insurance myths

Most people recognize the need for life insurance but many still don't have any, or have the wrong type for their needs, or just don't have enough.

Why?

People offer a variety of rationales for remaining uninsured or under-insured. But these reasons may just be myths. Here are a few of them:

“I have life insurance through my group plan at work and it's good enough.” - Group life insurance is generally easy to obtain, relatively inexpensive and the process is often quite simple with just a few questions and no medical testing. However, the coverage is often inadequate and insufficient because most group life insurance plans offer only a basic amount of coverage, typically one or two times your salary. Another disadvantage is it's tied to your job. If you leave your employer, you lose the insurance which can leave you unprotected.

“I've heard insurance companies will deny claims if you die from complications after getting the COVID-19 vaccine.” - Canadian insurance companies have spoken out against this misinformation, assuring Canadians that getting the COVID-19 vaccination does not impact their existing insurance coverage, and will not have an impact on their ability to obtain a new policy.

“Life insurance is too expensive and I just can't afford it.” - Life insurance, and particularly term life insurance, can be very affordable. In general, the cost of a life insurance policy depends on several key factors, such as your age, health status and history, smoking status, gender and the amount and type of insurance policy being purchased.

“I have health issues. There's no way I'll get approved for life insurance.” While some people do get declined for life insurance, the vast majority are approved. If you have underlying health issues or a risky lifestyle, your premiums may be more than the standard amount, or a policy may be issued with specific conditions.

“I'm young and in good health. I don't need life insurance.” - This may be true for some – not everyone needs life insurance. There are situations where life insurance may not be important at a particular time, but income replacement (disability) insurance might be. Many people, including those in good health, do need life insurance. Remember, life insurance is often more affordable for those who are young and in good health and can be a great way to plan for the future.

Don't let any of these myths deter you from obtaining life insurance. When you're ready to act, you'll need to ask some questions: how much coverage do I need? Should I get term or permanent insurance? How should I designate my beneficiaries?

You may want to work with a financial professional to determine the type and amount of insurance you need. Once you've gotten your coverage in place, you'll know that you've done what you could to help protect your loved ones – and that's no myth.

Join us for our upcoming virtual webinar, Living in Retirement: Actions to Consider in a Down Market. For information and to register, please call 902-681-2300.