I am currently a licensed agent, but not actively working in the field. Right now, I am working to become an EMS instructor at work. We have to give a few lectures on non-work related topics. I was thinking about doing one on insurance myths.
What are some of the biggest insurance myths that you have come accross?
The first one I am think of is suicide. If I remember my insurance class correctly, suicide is often covered after two years. Most people think that suicide is never covered. Am I right about this one?
Suicide may be different from state to state. I saw something about missouri and proving intent or knowing about the suicide intent upon application.
I think the biggest myth is that term life is always best!! ha ha { we have had several discussions on this}
I also think the other big myth is that everything is always covered 100% on health ins. people litterally think this.
The other health myth: "whoops, I'm coming down with something- I better go out and buy insurance to cover it."
I litterally had a guy call me one time to tell me he needed health insurance to cover all his psychiatric visits every week. They cost him like $90 a session, every week! Or it was some sort of mental rehab, or a visit to get his prozac or something- I don't know.
I have been around 22 years and never once heard any client question if it's correct to have life insurance on a child. Where is this coming from? I never heard it. Of course, I almost always sell whole life to the parents of the kids, so there's the savings aspect, there. I could see the questioning of putting like 250K term on a kid, I could see that...
Personally, I am not against the idea of getting life insurance for children.
Some financial planners or insurance agents hold different views. One of the reasons mentioned is that insurance should focus on the parents or the family breadwinners since generally a child does not contribute income to family and as such there is no major income loss to the family if the child is out of the picture.
There are some expenses if a child dies, I don't think anyone objects to this. My point to the parents is they will probably take some time off work as well, and need to cover this loss of income.
Add in the fact it's the best time to buy some permanent insurance for a person, while there is no medical issues.
Now, cap it at about $100,000, not exceeding the amount the parents have (there are reasons to have more than this, but they are a bit rare).
Gerber makes a business out of selling these policies.
Yeah, I never heard of a controversy about children's life, however, I do remember when I lived in NY there was a law that stated a kid could not have more than the parents- or it was some sort of percentage of the parents' insurance or something like that...
Selling car insurance a common myth we hear is "the accident was not my fault, "it was the weather, the weather was terrible" Allllllrighty then....so it's God's fault ?
Also, insurance men are hung like field mice... not true
There are some expenses if a child dies, I don't think anyone objects to this. My point to the parents is they will probably take some time off work as well, and need to cover this loss of income.
Add in the fact it's the best time to buy some permanent insurance for a person, while there is no medical issues.
Now, cap it at about $100,000, not exceeding the amount the parents have (there are reasons to have more than this, but they are a bit rare).
Gerber makes a business out of selling these policies.
The best reason, in my opinion, to buy life insurance on a child is if something would happen to them that would prevent them from buying life insurance later in life.
I have a cousin who the doctors discovered had a heart murmur at age 12. Later in life when he tried to apply for life insurance he was turned down. Had his parents taken a policy on him at a younger age he would have a lot more life insurance than he does now.
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I think we should add the myth that some people think they'll be fine getting insurance on their own without utilizing an agent, and when they realize an HSA/HDHP isn't what they expected after finding out that they do not have a co pay . . .
Insurance Myths
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