September is Life Insurance Awareness Month. We are writing simple posts to debunk some of the myths people may have about life insurance.
Fact: It is possible to convert a term life insurance policy into a permanent policy, called a term conversion for some policies; however, you should expect an increase in premium. The benefit to you is that you don’t have to submit evidence of insurability again. Many people like to purchase term insurance, which tends to be less expensive, while they’re younger and convert to a permanent policy if they realize that coverage is needed for a longer period of time.
Fact: Life insurance can help achieve a goal of leaving an inheritance to your children, or help relieve the burden of paying for final costs such as a funeral or final medical bills. If you died today, your spouse will still be faced with daily living expenses. What if your spouse outlives you by 10, or even 30 years, which is certainly possible today? Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren?
Fact: It is easy to underestimate the amount of savings that is required in the event of death. Most Americans do not have enough in their personal savings to cover these expenses. If you don’t have enough saved, it is possible your loved ones won’t be able to pay off final expenses or be able to hold onto assets like a home. Use this calculator to determine how much life insurance you may need.