MYTH NO. 1
Your family relies on your income regardless of whether you bring home the largest paycheck. Stay-at-home parents also should invest in life insurance because they perform valuable services, such as childcare, cooking, cleaning, and other household roles which would be extremely costly to hire outside help.
MYTH NO. 2
If I still need protection when the term policy ends, I can always renew the policy.
Term life insurance is popular among young families, as it typically offers the greatest coverage for the lowest cost. Term policies provide protection for a specific amount of time (the “term”), as well as for needs that will disappear over time, such as a mortgage or a child’s education.
MYTH NO. 3
I only need term life insurance.
Term life insurance makes sense for many young families, as their need for coverage is great and their budgets are often limited. However, that doesn’t mean that term life is the only type of insurance you should consider. Permanent insurance policies provide a death benefit as well as other unique features such as lifelong protection and the ability to accumulate cash values on a tax-deferred basis, like assets in most retirement-savings plans. You can access the cash values for important uses like a child’s education or a business opportunity.
MYTH NO. 4
I can get a better rate of return if I invest my money elsewhere.
While the most important reason for any life insurance purchase is to provide protection for your family, permanent insurance policies provide you with the ability to accumulate cash values that grow over time and can be borrowed against or withdrawn. (Withdrawing or borrowing funds from your policy will reduce its cash value and death benefit if not repaid.) And contrary to what many people believe, long-term rates of return on cash values are generally comparable to relatively low-risk investment products. Since understanding rates of return can be difficult, the best way to find the right solutions for your needs is to consult with an insurance professional.