Life insurance policies may not be great party conversation but do you know the facts that could save your family financially?  seven misconceptions about term life insurance and some of your most common questions We’re talking life insurance facts today, looking at exactly how much life insurance you need, how much it costs and how to get the lowest premiums by shopping your life insurance policy online, some of those biggest misconceptions and facts about life insurance policies and  then some basic questions on insurance people tend to overestimate the cost of insurance A 2018 study by the Life Insurance and Market Research Association found that people tend to think life insurance costs three-times its actual cost and 44% of millennials overestimate the cost by about five-fold In a 2015 Insurance Barometer study, people were asked to estimate the cost of a life insurance policy for a healthy 30-year old and estimated between $400 to $1,000 a year Actual cost of that policy, less than $200 a year What’s bad here is that 63% of Americans say price is the reason they don’t buy life insurance So there’s a disconnect here, people aren’t buying life insurance because of the cost but they are way off on what that actual cost Is a disturbing trend was that fewer employers are offering coverage to workers It seems employee insurance coverage is going the way of the pensions and the Dodo

    In 2017, less than half of employers offered life insurance as a worker benefit, that’s down 23% since 2006 and it’s something that’s been trending lower for decades Four-in-ten Americans don’t have life insurance coverage either through an individual plan or through work Take this with the fact that almost one-in-five Spouses has no idea how much coverage their significant other has and you see how we’re setting ourselves up for a huge financial burden More than a third, 35%, of households say they would feel a financial burden within30-days of the death of the primary earner.

 The average funeral costs between seven and ten thousand dollars so when you consider most people don’t have enough saved to cover a $1,000 emergency expense, any loss of incomes financial ruin Some pretty surprising facts about life insurance but what are those basic questions about insurance we all need to know?  what’s  the difference between certain types and how exactly does it all work? what’s the  difference between term life and permanent? How is whole life and universal different from term life policies? Term life is the most common type of insurance and the best for families in most situations The policy covers you over a period of years, anywhere from 5 to 40 years and you can pick your coverage amount

It’s designed to replace that income if the wage earner or even if a stay-at-home parent dies and you need help paying for expenses On the other hand, permanent life insurance, the most common types here are those whole life or universal policies, this covers you for your entire life It can build up a cash value and it’s a good option for high-net worth families that want to leave it as part of an estate but it’s way more expensive than term life Usually, the term life is the best option because it’s less expensive and you really only need coverage for as long as you’re earning an income or taking care of your family, do your term life premiums increase and by how much? On a term life policy, your premiums, that

amount you pay each month or year, stay the same for the entire period That means if you sign up for a five-year policy, they’re guaranteed to stay the same for five years If you buy a 25-year policy, they’ll be the same for 25-years Now the premium on a 25-year policy is going to be more than a five-year because you’re locking in the insurance company for almost three decades

The thing is here, after that five- or ten-year policy term ends, your premiums might go up So it’s a matter of paying in a little more to lock-in your premiums for a long time or saving money now but maybe paying more in the future One note here, Your premiums are based on your age and other factors like your health.

That usually means the younger you start, the lower your premiums will be and you can lock those premiums in with a longer-term policy Wait until you’re older to start your premiums and they’ll be higher , So the fact is here, yes you do usually need a medical exam to get life insurance l know it’s a pain but an exam helps the insurance company assess your health and it’s your best bet on getting the lowest possible premium.

Think about it All those life insurance policies advertising no medical exam, they have no way of knowing your health risk so they’re going to be charging more to cover that uncertainty You might be healthy but your premiums go to pay the benefit on everyone insured by that company so you’re bound to have a lot of people that didn’t want to take that exam because they were in poor health and it’s going to cost everyone more money Now some companies have started to waive medical exams for people in a certain age range, younger people, it’s typically 50 and under but this is more the exception rather than the rule Hey,  it’s going to help you make sure you’re getting a good premium rather than that higher risk-adjusted premium for the uncertainty the insurance company has to manage.  what happens if you  outlive my insurance policy? So the easy answer is just that your coverage expires at the end of term life insurance You can apply for another term or convert it into permanent life insurance but thinking about this,

A lot of people don’t buy insurance because they don’t think they’ll need it They roll the dice, saving a little each month, thinking the odds are pretty long something will happen to them It’s the same with car insurance or insurance on your home, right? But you don’t buy car insurance because you think you’ll need it You don’t sign those papers and then start driving like a bat out of hell trying to cashing on that policy

You actually hope you won’t need to use it but you want that peace of mind and protection against that what-if It’s the same thing with life insurance you  sincerely hope you  outlive your  insurance you  hope  you  get to 65, your  term life policy expires and you are  no longer covered.

Hell, maybe you  will tack another ten year premium on to that and hope you outlive it as well! But you have got the policy to protect your  family if the other scenario happens you  know they won’t have to worry about money after losing you Now after all this, the facts on how many people aren’t covered and some of those myths around life insurance policies, it seems even many of the people covered may not have enough While six-in-ten Americans have some type of life insurance, almost half, or 47%, have less than $100,000 in coverage

That might seem like a lot but the basic rule is to have 10-times your annual salary Remember, we’re not just talking about $10,000 to pay for burial expenses or to help pay for living expenses for a few years Your family could be out your income for decades That means not only living expenses but help saving and for those college expenses as well

the upside to all this,  is that it’s becoming easier to shop around for life insurance and get the coverage you need Six-in-ten Baby Boomers report finding information about coverage online and half of all Americans have bought or looked for information about life insurance online Not only are the online marketplaces becoming THE place to find information but it’s a great way to shop your insurance around to get the best rate possible Life insurance isn’t something you can wait on and it’s not the huge cost most people think.

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