When it comes to employee benefits, particularly insurance, there’s a lot of information for employees to comprehend. Sometimes it can seem overwhelming just how many options employees have at their fingertips. This is why it’s crucial to educate employees about the benefit packages that are offered and how each one affects both the employee and their family.
When discussing employee benefits, most people tend to think of health insurance and 401(k)s. What is often overlooked are the countless other benefits offered by employers that have big impacts on workers. One such example is life insurance
. While many people don’t like thinking about life insurance because of what it entails, not fully understanding its importance can be a costly mistake.
Perhaps due to the topic, or the vast amount of information that comes when getting life insurance, many Americans have misconceptions that stop them from getting covered. Most of these are simply myths, yet they stop people from looking into whether or not life insurance is right for them. Let’s take a look at five common life insurance myths and why they aren’t true.
1) Young People Don’t Need Life Insurance
Young adults often forego life insurance coverage until they have families. However, their loved ones could be financially challenged in the event of their early passing due to an expensive student loan balance or other debts. These are important things for younger people to consider when thinking about life insurance.
2) Single People Don’t Need Life Insurance
Just because an employee has no dependents doesn’t mean that they don’t need life insurance. In the event of a person’s passing, there are a lot of expenses that family will have to pay for. Life insurance can help ease the financial burden placed on family members.
3) Only People with Income Need Life Insurance
In households where one partner works and the other is a stay-at-home spouse, it’s important for both to be covered by life insurance. Stay-at-home spouses and parents do a lot of work every day to keep the family and household running. Make sure they are covered, too.
4) A Savings Account Can Replace the Need For Life Insurance
According to Bankrate, 28% of Americans don’t have anything saved for emergencies and just 4 in 10 American families have enough to cover three months’ worth of expenses. Most families would require a minimum of 10 to 15 years of income replacement after the premature death of a household earner. While having savings is extremely important, it does not replace what life insurance can provide.
5) Life Insurance is Too Expensive
Cost is the reason most Americans give for not owning life insurance—yet, 80 percent of consumers misjudge the price for term life insurance by 100 to 200 percent, according to the 2015 Insurance Barometer Study by LIMRA and Life Happens. In addition, many companies offer group life insurance as a benefit, which may be cheaper and easier to sign up for. Be sure to fully know all the benefits and perks your employer offers.
Don’t Get Caught Up in Life Insurance Myths
The myths mentioned here deter many people from seeking out and getting life insurance coverage. Instead of falling for these misconceptions, try to educate yourself on the importance of life insurance and the potential outcomes of not being covered.
If you are an employer that offers life insurance, be sure to have the resources in place to help educate your workforce. Making sure your employees are fully informed about their benefits and how they impact themselves and their families should be a top priority. Your employees will thank you for it!
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