GRAND RAPIDS, Mich. (WOOD) — One-third of Michigan residents do not have a life insurance policy, according to a recent AAA survey.
The insurance company conducted the study in September, which is Life Insurance Awareness Month.
AAA said one factor for the lack of life insurance may be because most people don’t like to think about death. However, the agency says a plan is necessary to secure a financial future for their loved ones.
The survey revealed at least one silver lining: More than half of those who did have life insurance had a policy valued between one and three times their annual salary.
The report mentions a number of preconceived notions about life insurance are often false, including:
Myth: Life insurance is too expensive.
Truth: Many people overestimate the cost of a policy. People in Michigan cite cost as the number one reason they have not purchased a policy. One-third of residents estimate a policy premium can cost anywhere from $500 to over $3,000. A life insurance policy can be quite affordable.
Myth: I don’t need life insurance; I’m a stay-at-home parent.
Truth: Stay-at-home parents provide a valuable contribution to the home, even if they are not bringing in a paycheck. A spouse who is employed may need money for child care, housekeeping, and other household tasks that were previously performed without financial compensation.
Myth: I’m single, I don’t need life insurance.
Truth: There are many scenarios that make life insurance a good idea for single people. For example, you may have elderly parents who depend on you for their care (or will in the future). You may want to leave funds for a family member, or even make a financial contribution to an alma mater or a beloved charity. Some life insurance policies can have value other than a death benefit. For example, universal life insurance grows cash value over time, and loans can be taken out on the value of the policy at a fixed rate.
Myth: I’m a senior citizen and can’t get life insurance.
Truth: There are policies available to senior citizens, that can play an important role in the handling of final expenses, which could burden a surviving spouse or other family members. The sooner you take action to obtain a policy, you will receive more choices for coverage and more attractive premiums.
AAA reports the best thing to do is talk to a life insurance agent about the best coverage for you.