You Can't Take It With You ... But Are You Leaving Enough Behind?

Millions of Americans have no life insurance coverage, and even those people who do have coverage usually don't have enough.* The reason? Besides the fact that most people don't want to think or talk about needing life insurance in the first place, many of us simply don't understand how much coverage we need -- or the potentially devastating effects of inadequate coverage.

See how many of these life insurance myths you secretly believe:

• My employer pays for my life insurance so I don't have to worry about it.
• I already have enough life insurance.
• I can't afford life insurance.
• I'm single so I don't need life insurance.
• My spouse has a good income so even if I don't have coverage it wouldn't have a major impact on my family.
• My spouse doesn't work outside the home so we don't need life insurance for him or her.
• There's no need to buy life insurance for my children.
• I'm healthy -- I can worry about life insurance when I get older.

If you agreed with any of the statements above, it's time to learn more about how life insurance can help protect you and your family.

Myth #1:

My employer pays for my life insurance so I don't have to worry about it.

Truth:

If your employer is paying for your life insurance coverage, it's almost certainly a group policy that only covers you while you're employed there. In fact, only 41 percent of adult Americans have individual life insurance.* This means you could be vulnerable if you lose your job or have a break in employment. "Individual voluntary life insurance you buy at work is a good solution for many people," explains Monica Francis, director of product development for Colonial Supplemental Insurance. "Individual plans are portable, so you can keep the coverage if you change jobs or retire."

Myth #2:

I already have enough life insurance.

Truth:

The U.S. Justice Department calculated compensation needed to meet the needs of families of victims of the September 11, 2001 terrorist attacks and recommended 12 times income for couples without children and 20 times income for households with children.* The average family is underinsured by more than $300,000.*

Myth #3:

I can't afford life insurance.

Truth:

There are many types of life insurance available to meet different needs and budgets. Term life plans are often available for a few dollars a pay period. Even a little life insurance is better than none at all. "A voluntary plan bought at work offers the convenience of payroll deduction," Francis says.

Myth #4:

I'm single so I don't need life insurance.

Truth:

Even if no one else is depending on your income, you're still likely to leave behind bills, credit card balances and final expenses such as funeral costs. These expenses could be an unnecessary burden on parents or siblings at a difficult time.

Myth #5:

My spouse has a good income, so even if I don't have coverage it wouldn't have a major impact on my family.

Truth:

Widows and widowers say it takes four to five years before their financial circumstances returned to what they were at the time of their spouses' death*. One to two years after the death, half the widows and a third of the widowers were just getting by financially.*

Myth #6:

My spouse doesn't work outside the home so we don't need life insurance for him or her.

Truth:

You probably depend on your spouse for many things you might have to pay someone else to do: child care, laundry, cooking, shopping, cleaning, home maintenance, transportation, errands. Adequate life insurance for a nonworking spouse can provide the income needed to protect your family's way of life.

Myth #7:

There's no need to buy life insurance for my children.

Truth:

Children who die prematurely will still leave behind final expenses such as medical bills and funeral costs. In addition, buying and keeping coverage for children while young protects their insurability if they should develop a health condition later in life that could make it expensive or impossible to get coverage.

Myth #8:

I'm healthy -- I can worry about life insurance when I get older.

Truth:

It's usually more cost-effective to buy life insurance when you're younger. The cost of buying insurance tends to increase as you age. And buying a policy when you're young and healthy means you'll already have the coverage if you develop a health condition later that could make you uninsurable.

"Nobody likes to think about their own death or a family member's," Francis says. "But we also hate to think about leaving our loved ones to deal with financial problems at an already difficult time. Taking time to review your life insurance needs and coverage is one of the smartest things you can do to protect yourself and your family."

Source: eba.benefitnews.com - 09-15-2004p>