Myth: I don’t need to buy life insurance when I’m young.
Young family physicians and residents should purchase life insurance early on in their medical career. This is a point that can’t be stressed enough. Young adults need to recognize the fact that their death could become a financial burden for their loved ones. Life insurance rates are based on age and health, so buying a policy early in your career will keep your rates low. Just remember, the primary purpose of life insurance is to provide a death benefit for your family if you die unexpectedly. And even if you don’t have a spouse or children, you can also use your policy to fund a charitable organization you care about.
Myth: A little white lie on an application never hurt anyone.
State laws require every application to contain a fraud warning similar to the following: “It is a crime to knowingly provide false, incomplete, or misleading information to an insurance company for the purpose of defrauding the company. Penalties may include imprisonment, fines or a denial of insurance benefits.”
Therefore, when it comes to life insurance or any type of insurance, it’s always best to be completely truthful and careful when completing an application. For example, while most family physicians are non-smokers, you need to pay careful attention to the question asked on the insurance application. Does it ask if you are a non-smoker or non-tobacco user? Applicants who chew tobacco or use a nicotine patch are considered to be using tobacco. So, whether its tobacco use, a history of alcohol or drug use or a family history of cancer, full disclosure is always best.
Myth: Once I have life insurance, I don’t have to worry about it – ever.
Life changes and so may your life insurance needs. The following common life changes should result in a re-evaluation of your policy:
- You purchased a new home with a larger mortgage.
- You are recently divorced.
- You celebrated a recent engagement or marriage.
- There is a new member of your family to care for.
- Your standard of living has increased.
- You have more debt.
- You haven’t saved for your children’s education.
- You have an aging or disabled family member that needs your help.
- You have a new or expanding practice.
- You have experienced slower-than-expected growth of your savings.
- You wish to shield your heirs from estate taxes.
If any of these life-changing events occur, you may be required to update your beneficiaries or the amount of insurance coverage you’ll need. Review your policy periodically to make sure you are covered for anything life may throw at you.
Myth: I’m the breadwinner of the family, so I’m the only one that needs life insurance.
While family physicians can make a significant amount of income, that doesn’t mean their spouses or partners don’t have anything to contribute to the household. And while family physicians will have more income to insure, your family may not be able to live off of the single policy. Take extra precaution by having your spouse purchase life insurance in case s/he passes away. This is important considering that 30% of U.S. households have no life insurance at all and only 44% have individual life insurance, according to a recent LIMRA report. With more than one life insurance policy in place, you and your spouse will be able to protect your family’s well-being for years to come.
Life insurance is about preparing for the future, so make sure the future looks bright for your family.
Sound off: What are some other myths you’ve heard about purchasing life insurance? Tell us in the comments below.