Myths About How to Protect Yourself

Days are busy and the last thing on one’s mind is life insurance. Life insurance is protection against the unexpected to give you peace of mind that your family is taken care of if you’re no longer there. It is important because it protects what matters most to you. However, there are some common myths about life insurance which are important to dispel to understand what is important.

Life insurance is protection against the unexpected

Myth: I’m young, single, and have no dependents so I don’t need life insurance.

You may be young, single and have no children, but you may have others that depend on you, such as your parents. Having life insurance will help them manage the costs of funeral arrangements, personal debts, medical bills, or other liabilities that you really do not wish to pass on to loved ones. Life insurance is important even if you are single and have zero dependents—and being prepared for the unexpected is the best plan.

Myth: Only the breadwinner of the family needs life insurance.

Some people believe that only the employed spouse needs to be insured, but would you be financially able to continue to support your children, lifestyle and pay bills if the unexpected happens? A stay-at-home spouse frequently handles childcare, cleaning, laundry, cooking, errands, etc. so imagine the financial impact if that spouse was no longer there to contribute. Life insurance for the stay-at-home spouse allows the employed spouse to take extra time off work to cope and help the family cope with the loss, as well as make the necessary family adjustments. So life insurance for a stay-at-home spouse is every bit as important as the breadwinner.

Myth: My employer-provided term life insurance is enough.

If you are a single person with zero dependents this may be true, but if you have a spouse or dependents, then it is likely that the term life insurance that your employer provides is not enough. Typically, life insurance provided through your employer covers the amount equal to one year of your annual salary. After funeral costs, medical bills, and other debts you may have accrued, your loved ones would not have much left to financially cope into the future with mortgage payments, education costs, etc. Life insurance that covers 10 to 20 times what your annual salary is ideal to help ensure your family will be able to continue their daily routine—without selling the family home, dropping out of school, etc. While life insurance provided by your employer is a great benefit to have, it isn’t portable so when you leave your employer, you will no longer have that coverage. Therefore, it’s best to consider additional life insurance options for yourself and your family.

While deciding on the best life insurance policy to cover what you need to insure may be complicated, it is important that you don’t overlook it. For many, it can be difficult to cope with the thought of death; however, life insurance does not need to be confusing or misunderstood. The AIA Trust has resources to help guide you in answering your questions and concerns to get the coverage you need.

No matter your age, marital status, employment situation, or employee benefits, for financial security, life insurance should be part of everyone’s financial portfolio. Learn more about the term life insurance products available to AIA members* including product features, costs, eligibility, renewability, exclusions and limitations. If you have questions, call (877) 801 3727.

*Underwritten by New York Life Insurance Company on group policy form GMR. NYL-1885661

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