Posted: Feb 28 '12

The Biggest Myth About Life Insruance

You might have heard it from someone or you might even be the person who says, “life insurance is expensive.”   Well let’s look at some common items we all purchase in our lives and see how life insurance stacks up.

First we have all the items that depreciate about 25 to 30% the day we bring them home like cars, SUV s, boats, motor cycles and them they go down in value year after year.  And in fact most of these items will eventually be worth ZERO. 

What about real estate, have you ever seen real estate go down in value? 

Look at the stock market the last 10 years, has your portfolio increased a great deal?

Now back to life insurance, term insurance or universal life insurance.  You buy 500,000 dollars of coverage.  As long as the premiums are paid you will always have 500,000 in cash going to your beneficiaries when you pass.  The 500,000 is fixed.  The event of passing away is a sure thing. 

So it would seem that for life insurance to be expensive one would have to pay the life insurance company a lot more in premiums than the death benefit.  For the 500,000 dollars in death benefit do you pay 550,000, 600,000 or 700,000 thousand dollars in total premiums?

How Much Would Someone Pay in Premiums for Life Insurance

A male age 45, buying 500,000 dollars of coverage, if you paid the premiums and lived to age 90 you would pay the life insurance company 234,990 dollars.  Not bad about 50%!  The life insurance death benefit is fixed at 500,000 dollars.  The event of passing away is guaranteed we just don't know when.

The only time life insurance is expensive is if you pay the premiums for 20 or 30 years and then cancel the policy and take the life insurance company off the hook of paying your beneficiaries a death benefit.

Life insurance is not expensive; the way people think about life insurance makes it expensive if they cancel it and let the life insurance company keep the premiums.  Buy right, take the time to educate yourself and feel good about protecting your family and your business partners with the only product in the world that produces tax free cash at a time of need.   At a total price of about 50% of the face value.

Call an agent today and buy life insurance don’t be sold.

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About the Author - David Motkoski

David is a well-respected insurance advisor with over 30 years of experience helping healthcare professionals, business owners, and their families secure their financial futures. He takes the time to make certain his clients understand the life, disability, and health insurance products they are purchasing, so they can make the right choices for their budgets, plans, and futures. CONNECT WITH ME ON LINKEDIN