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3 Life Insurance Myths Young Families Should Know About

When you’re just starting your family it can seem like money flies out the door before it barely hits your bank account. With new financial commitments like buying your first home or starting your family, comes the responsibility to protect your loved ones, making sure they will be provided for financially no matter what happens.

If you were to die unexpectedly, life insurance is there to make sure that money is one less thing that your family will have to worry about when their life has suddenly changed and their hearts feel broken. Life insurance allows your family to maintain their standard of living, stay in their home, provide a way to pay for their college education since you will not be there to put the money away yourself. It allows your kids to stay in the schools they’ve always known and in an environment that’s familiar to them. When a family is dealing with the loss of a loved one, money and where it’s going to come from is the last thing they need to worry about. Life insurance is the promise that if the unexpected happens, they will be taken care of. It gives them time to adjust and make decisions on their terms and when they're ready, not under stress.

There are some common myths out there that prevent young families from protecting their loved ones financial future.

MYTH #1 – I Only Need Life Insurance If I’m the Main Breadwinner

Whether you bring home the biggest paycheck in your household, or if you’re a stay at home parent who manages the household, you bring value to the table. That value needs to be protected. Whether you are the main or only breadwinner, or whether you bring home the smaller paycheck in the house, your income is likely needed to pay all of the monthly bills and provide what your family needs. If your income is suddenly gone from your household, what kind of affect would that have on your family? Will they still be able to stay in their home? Put food on the table?

Stay at home parents might not get a paycheck for the 24-7 job that they do, but the value that they bring to the family has been estimated to be worth $120,000 a year. From childcare, cooking, cleaning, chauffeuring, and so much more, these are all valuable services that would be expensive to replace for a surviving spouse or partner. This value needs to be protected.

MYTH #2 - If I Buy a Term Policy But Need More When It Ends, I’ll Just Buy More

Term policies typically provide the largest amount of protection for the cheapest price, making them a popular choice for young families that would need a larger amount of protection. Term insurance provides you protection for a specific period of time (anywhere between 1 – 30 years). Term insurance can be ideal for individuals who have financial obligations that will taper off over time (a mortgage, children in the home).

However, many families realize that even when the home is paid off and the kids are grown and out of the house that the need for life insurance still exists. It can provide income for a surviving spouse, eliminate debts, pay estate taxes for your children to name a few. But the premiums you pay for life insurance are based on age. Simply put, the younger you are the cheaper it is for you and you can lock those rates in for life. So the cost of buying a policy in your 40’s will be much cheaper than if you wait until you’re in your 60’s. Plus waiting until you’re older increases your chances of developing a health condition which could take the option away from you entirely.

MYTH #3 – I Only Need Term Life Insurance

Term life insurance makes sense for many young families as they need a lot of coverage and have a limited budget. But it is not the only option they should be looking at, and should keep in mind that their insurance needs will change over the years.

Permanent life insurance policies offer many benefits that term life insurance can’t. They offer lifelong protection, as well as cash value that you can access for various things throughout your lifetime. If these benefits are important to you, keep in mind that you can have a term policy as well as a permanent policy at the same time. The term will offer you a large amount of coverage during the years when you will be carrying large financial obligations, and as the term policy drops off you will still have a permanent policy to take you through the end of your life to provide all of the other benefits that you will need.

Your life insurance needs will change throughout your life, and so will your insurance coverage. An agent is your biggest asset in leveraging these powerful products to fit your families specific needs and goals, providing you with coverage that can grow with you.

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Protect your family's future. Call Tenaya Insurance Services today at (925) 322-8073.

#LifeInsurance #Financial #Women

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