In the financial industry, we use acronyms every day; IRA, TOD, SPIA, and so on. You may know what some or all of those stand for, but I’m guessing you don’t know this one; LIAM (Life Insurance Awareness Month).

The month of September is Life Insurance Awareness Month, and we thought it would be the perfect time to debunk some of life insurance’s biggest myths. One of the most common and expensive misconceptions of life insurance is “if I’m young and healthy, I don’t need it.” MYTH! We are all going to leave this earth one day, so we all need it, and while insurance premiums are based on several factors, age and health are at the top of the list, that is why putting it off can be a costly mistake.

Most employers offer some sort of life insurance coverage as an added benefit. You may think that’s sufficient, but unfortunately you would be another MYTH! Most employer-offered life insurance policies aren’t portable, which means once you leave, you lose coverage, and you are back to applying for a policy at an older age with potential health issues resulting in higher premiums.

You’ve decided to stay at home and raise the kids, you don’t draw a “typical salary” so there’s no need for life insurance. MYTH! Although you aren’t bringing in a monthly paycheck, your services are invaluable. Life insurance can help cover the cost of childcare, transportation, home maintenance and more.

Another misconception is that Term Life Insurance is always the best option. Not necessarily. While term life is typically less expensive and can be a great option for many, it doesn’t necessarily fit all needs. For example, a business owner who is trying to mitigate risk for his company could benefit from a whole life or more permanent insurance product. Premiums for a whole life policy stay consistent and a portion also builds a cash value that can be used. It can be a great way to keep the company afloat should something happen; it can be used to pay off business debt and supplement cash flow. A life insurance policy is also used for business transition purposes like buy/sell agreements and protection against the loss of a key person. Not to discount the most important feature providing you peace of mind so you can work to grow your business.

Have you considered life insurance for your children? Although no one wants to think about something happening to a child, getting a small life policy on a young one can insure their future insurability. Consider this: your healthy bouncing baby boy gets a life insurance policy for $10,000.00 at age four, premiums approximately $5.00/month. * Fast forward ten years and you’re in the doctor's office for a routine sport physical and find out he has diabetes. Although he can live a long healthy life, the chances of him ever getting life insurance from this point on are slim to none. In fact, if he is able to pass underwriting, the premiums will likely be astronomical. Luckily, you thought ahead!

Life insurance isn’t always about dying. Most times it is really about protecting the ones you love, your legacy, and your peace of mind. To learn more, contact one of our eight licensed insurance agents on staff. 

Rachel Kleven, FPQP®, Licensed Insurance Agent

*https://choicemutual.com/blog/mutual-of-omaha-children-insurance