Top Life Insurance Myths... Busted

Myths and inaccuracies about life insurance can get in the way of you making a smart and informed decision about life insurance. The professionals at Spectrum Direct are committed to making the purchase of life insurance as smooth and easy as possible. For that reason, we take this opportunity to bust several of the most common myths about life insurance.

Myth 1: Life insurance policies are expensive.

Actually, life insurance is the most cost-effective way to provide financial security to your family if you die before reaching your life expectancy. This security is delivered in the form of income replacement, elimination of debts such as mortgage payments and car payments, educational funds, payment of final expenses, etc. No other financial tool can accomplish this.

So, in our opinion, life insurance is truly not expensive. The expensive outcome, in terms of financial troubles and emotional impact on the surviving family would actually come about by NOT having life insurance.

Myth 2: My health will not allow me to qualify for a policy.

Life insurance customers are placed in a variety of health categories, ranging from a low-risk "preferred" to high-risk "table-rated." A serious illness, such as diabetes, will not necessarily disqualify you from buying a life insurance policy, but it may place you in a somewhat higher-risk category.

Some life insurance companies will not issue policies to individuals with high-risk profiles, but others will - for an extra fee. Also, there are companies that specialize in insuring people with riskier health histories. If you are in a high-risk category and had difficulty finding a policy the first time you shopped, don't give up. Let the knowledgeable agents at Spectrum Direct find the insurer who is right for you.

Myth 3: My spouse has a policy, so I don't need one.

The rising cost of living, which includes childcare expenses, has made it necessary for many families to have two incomes. If both spouses contribute to the monthly budget, losing one income will be very stressful for a family. In most cases, both adults in a family should have a life insurance policy. Otherwise, if one parent passes away, the family may be unable to make mortgage payments or pay basic bills.

Even in the case of a single income household, it is often important to provide life insurance on the spouse who does not work outside the home. In the event of the non-working spouse's death, the life insurance proceeds would be used to provide child care to make sure the children in the family are as well taken care of as possible.

Myth 4: I'm single with no dependents, so I don't need a policy.

There are a number of good reasons for a single person who currently has no dependents to own a life insurance policy.

First, because life insurance policies generally cannot be cancelled by the life insurance company once it is issued to you, it's smart to buy when you are younger and without health issues. That way, if you should develop a health condition that would make it expensive or impossible to buy life insurance otherwise, you will already have coverage in place. Think of it as protecting your "insurability".

Second, you may decide to get married and have or adopt children; in which case, you will need life insurance. You might, at some point in the future, be in the position of having to care for aging parents. Life insurance will protect them in the case of your death. Also, you might enter into various types of business arrangements which require you to carry life insurance to protect the financial interests of partners and others who would be at financial risk if you suddenly were no longer in the picture.

Lastly, life insurance for a single person is often needed for the payment of final expenses, debts and funeral costs. Proceeds can also be donated to a favorite charity or alma mater.

Myth 5: You have to take a medical exam to get a life insurance policy.

While it is true that some life insurance policies require a medical exam, other policies do not. They're called "simplified-issue policies" and are available without a medical exam, as long as you qualify with some basic questions about your health. The agents at Spectrum Direct are specially trained in non-medical life insurance. They can provide you with a free, no-obligation quote, and if you qualify, your policy could be in-force in as little as 24 hours.

Have questions? Call us, we're here for you 1-800-438-7343