Know These Misconceptions About Life Insurance
Life insurance is one of the best ways to ensure the financial security of your family, no matter what tomorrow brings. Don’t let these four misconceptions stop you from attaining the coverage you need.
1. Only the Primary Breadwinner Needs Life Insurance
Even those who do not work outside the home need coverage. Stay-at-home parents, for example, perform invaluable services such as childcare and household management which can be costly to replace.
2. You Always Can Renew Your Life Insurance Policy
Term coverage is the most affordable type of life insurance, but because premiums increase with age, renewing a policy when a term expires can be costly. And, it’s often the case that continued coverage is desirable even when mortgages end or children leave home. So, maintaining a consistent level of coverage via a permanent policy can be financially prudent.
3. Permanent Life Insurance is a Just Longer Version
Permanent insurance isn’t just a longer version of term life insurance. Permanent policies provide a number of added advantages, including a death benefit, the ability to accumulate assets on a tax-deferred basis and more.
4. Life Insurance is Not a Good Investment
Life insurance can be considered a low-risk investment. Compared to other relatively low-risk investment products, the long-term rates-of-return on cash values with life insurance are generally quite similar. Regardless, speak with an insurance professional to determine the right solutions for your needs.
—Written by AAA Washington staff, last updated in July 2023.