One of the biggest myths surrounding the purchase of life insurance is that you’re only insuring income. Nothing could be farther from the truth, just ask anyone who’s lost a loved one and had to get back to work the day after the funeral.
I have a friend who lost his young son in a tragic accident. His medical insurance had a very high $2,500 deductible with a family maximum cost of $15,000. Those numbers were quickly surpassed prior to his son passing away at the hospital. The Life Flight helicopter alone was over $8,000 but his medical insurance only paid $250 (a common standard). His son’s funeral was bare bones since he had no cash to handle the medical expenses AND the funeral costs … and he had failed to purchase any life insurance at all on his son.
Life insurance is about more than insuring income … much more
Life insurance isn’t just about families insuring the income of the main breadwinner. It’s also about three other often overlooked costs:
- The final medical expenses
- The funeral costs
- The cost of your mental stability
Final medical expenses
If you lost someone close to you, especially a child, would you be able to foot the entire bill not paid by your medical insurance? Or would you have to declare bankruptcy like my friend did? When he and his wife arrived at the hospital, he had to fill out and sign all sorts of forms. To this day he doesn’t remember much about what he signed but he agreed to be financially responsible for the bills. You won’t get around this one.