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Overcoming The Myths/Misconceptions of Life Insurance



Life insurance is one of the most misunderstood areas of insurance. Who needs it? How much? And when should you get it? If you ask 10 different people on the street, you’re likely to get 10 different answers from “I’m too young” to “It’s too expensive” to “I’d rather invest the money.”

Patrick Bet-David breaks down seven of the most common myths and misconceptions about life insurance because he says the truth is too many people don’t have it, or don’t have enough coverage:

It’s not possible for a company to pay $500,000 in death benefits when I’m only paying $50 a month
What most people don’t know is that if all policy holders kept their policies, life insurance companies would be in trouble. But they make their money because people tend to cancel their policies every 7-10 years or so. If you’re smart, you’ll keep the policy. They can afford to give $500k for $50 a month when they know that 98% of policy holders won’t keep their policy for the life of the policy.

I’m young & don’t have a need for it
Most people eventually get married. If you’re smart enough to buy it when you’re young & single with a low monthly cost, you’ll benefit in the long run. Also, you still have a need for final expenses, unpaid debts, and medical bills.

Life insurance is more expensive today because of inflation
What most people don’t know is that life insurance cost is based mainly on your life expectancy. If you live longer, your policy will be cheaper. And today’s life expectancy is longer than ever, which means insurance is cheaper.

Only breadwinners need coverage
Can you imagine what it costs to hire a home maker raising kids? Now multiply that times the number of years your kids will be under your support financially. That’s how much insurance the home maker needs.

I’d rather invest that money than buy coverage
I have yet to meet someone in their sixties that was upset because they bought too much life insurance when they were young. The complaint is always, I wish I had more. If you can’t afford a permanent policy the least, you should do is protect yourself with a 30-year term. (If age allows)

I won’t be dying anytime soon. I’ll get it later
A very extensive study of roughly 113 billion people shows that 100% of people die. The only problem with that study is we don’t know when.

My policy at the company I work at is plenty
It usually isn’t since it’s normally two to three times your income, but even with that it’s very annoying when you get laid off from the company you’ve been with for 17 years, and now you’re in your early 40s with no coverage and three dependents who count on your income. Having your own policy outside of work protects you regardless of what your company decides to do.

So if you’ve been on the fence about getting an instant life insurance policy, take these notes to heart. And let me tell you from personal experience, life insurance rates only get more expensive the longer you wait..

Patrick Bet-David is CEO of PHP (People Helping People), a firm that offers a broad array of insurance and financial services products. Patrick is also author of The Next Perfect Storm, a book about life insurance, and a financial blogger at

Zander Chance is a technology nut who is always first in line to try out the latest tech gadgets. He also has been an active affiliate marketer for the past 15 years, and he writes about his adventures in that on his blog.

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