Life Insurance Myths and Facts

by MyFOXColorado.com
DENVER - You can probably save money if you make sure that you are well-informed about your life insurance policies.

You'll find some common myths about life insurance below, courtesy of Allstate insurance. Insurance expert Steve Cocker appeared on Good Day Colorado with anchor Shaul Turner.

· Myth: I am single. Most single people don’t have a pressing need for life insurance because no one depends on them financially. However, there are exceptions -- for instance, if you’re providing financial support for aging parents or siblings.

· Myth: I don’t work. Stay-at-home parents often make significant financial contributions to a family’s budget by providing such things as childcare, transportation and housekeeping services that could add up to $40,000 a year according to The Life and Health Insurance Foundation for Education (LIFE). Could a single surviving spouse afford to pay for these services on his or her own?

· Myth: Group life provides all the coverage I need. Group life insurance is a great component of a life insurance program. However, the coverage offered is not always enough to take care of your beneficiaries and usually offers limited coverage options. Group policies are generally non-transferable once you leave your current job.

· Myth: A permanent policy is better than a term policy. The kind of coverage that’s right for you depends on your unique circumstances and financial goals. A term policy generally offers the greatest coverage for the lowest initial premium and is a great solution for people with temporary needs. A permanent policy may work best if you anticipate a need for long-term protection.

· Myth: I have a term policy but can’t convert to a permanent policy. Not all term policies are the same. Some may have certain provisions as standard features, including convertibility. This feature allows you to convert your term policy to a permanent policy without submitting evidence of insurability. The amount of time that you have to convert varies. The key is to check on your provisions and make the move to permanent coverage when you can if that’s what you need.