3 insurance myths, debunked
You insure your home, car, health and even have pet insurance – so why wouldn’t you insure your life and income?
If you're working hard toward a financial goal, you should think about life insurance and disability insurance, too1. But there are some familiar excuses not to use these common-sense protections. Let's consider the big ones.
Myth #1: "Insurance is too expensive."
Not true. Life insurance is available for nearly every need and budget.
A 35-year-old man can buy $250,000 of annual renewable term life insurance coverage for less than $20 per month.2
For just over $100 a month, he could also purchase permanent life insurance that has a guaranteed death benefit for his lifetime.3
Same is true for income-protecting disability insurance. For around $22 per month, he could buy disability income insurance that would pay him $1,000 per month until age 65, if he ever become too sick or hurt to work.4
That’s less than 2% of his annual income of $75,000 and is in-line with other expenses like a monthly date night or cable bill. The best part? He could buy less than that, too, based on his budget and financial needs.
Myth #2: "I can wait to buy insurance when I need it."
You may think you’re saving money by delaying the purchase of life insurance and disability income insurance. But most policies let you lock in your monthly premium so you can take advantage of lower rates when you’re younger.
Rates will increase as you age, and in some instances, you may reach a point when you’re no longer insurable.
So, start small to lock in rates now. You can usually increase your coverage over time.
Myth #3: "I can just do this myself."
Okay, so that's true. But the whole process can be much easier if you’re working with a financial professional who …
- assesses your insurance needs, overall financial situation, tolerance for risk, and the type(s) of insurance that work best for your own unique state of affairs.
- helps you understand insurance policies and riders, plus explains the features and benefits that are right for you.
- may be a catalyst in the planning process, bringing together your other advisors (such as attorneys or accountants) to form a coordinated financial planning team.
- completes the necessary forms to start the underwriting process and arranges for any tests or exams that may be required. This may include follow-up with the underwriters to facilitate the process.
Your financial professional usually delivers your policy in person, explains the coverage, and answers any questions. In the event of your disability or death, that same financial professional will be a great resource to your family.
Take the next step
Curious how much life and disability insurance you may need? Use our insurance calculators to find out, and then call a financial professional who can walk you through the next steps.
1 All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.
2 Based on current rates and charges for a 35-year-old male non-smoker rated Super-Preferred. For specific information, please contact your financial representative.
3 Based on current rates and charges for a Principal Universal Life Protector IVSM policy for a 35-year-old male non-smoker rated Super-Preferred. For specific information, please contact your financial representative.
4 Disability income insurance calculations are based on a variety of factors, including age, state and product features. Disability income insurance also has limitations and exclusions. For specific costs and complete details of coverage, contact your financial representative.
Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Securities offered through Principal Securities, Inc., 800-247-1737, Member SIPC and/or independent broker/dealers. Principal National, Principal Life, and Principal Securities are members of the Principal Financial Group®, Des Moines, IA 50392.