It’s amazing how ideas and stories find their way into people’s heads, and then through conversation, email, social media and rumors, those ideas (non-factual) become perception. That perception is real and that is all that matters. The sad truth is that many people believe the cost of life insurance is more than double of what it actually is. So you know what they do?
THEY DON’T BUY IT!
According to the 2015 Insurance Barometer Study by Life Happens and LIMRA, 65% of people say that life insurance is too expensive. This perception isn’t based on reality however! Nearly 80% of people overrate the cost of life insurance. Take a look at this infographic:
Even if the cost of life insurance was more than double, it would still be a good deal! Take a 50 year old male in average health (standard non-smoker). If he purchased a $2,000,000 20 year term policy with Lincoln Financial, the premium more than doubled (let’s say 2.5x) would be $15,835/year. Over 20 years that would be $316,700. For $2,000,000! And the policy is fully convertible meaning you could pay to keep it in force for life (or at least longer than 20 years). Imagine this client passed away the day after paying his 20th premium payment. His beneficiaries would receive $2,000,000 on an investment of $316,700. Where else can you find that return?
Now, let’s talk facts. This 50 year old male could actually buy $2,000,000 of coverage for 20 years at Lincoln Financial for $6,334/year. A total premium over 20 years of $126,680. Even better. Much better. But a good deal either way because if the death benefit pays out one day, this isn’t a cost–it is a premium for a payout at a later date.
In the end, don’t let misconceptions about the real cost of life insurance cloud reality.