Most people are misinformed about life insurance and other financial products, according to a survey by Northwestern Mutual Life Insurance Company. Almost two out of three respondents failed a financial products knowledge quiz.
In particular, many seemed to lack an understanding of life insurance plans. Almost 50 percent have the false notion that permanent coverage is less likely to have a cash value in comparison to a term policy.
A representative from the company, Dave Simbro, said many investors are missing out on valuable money planning options by not understanding how life insurance policies work.
“It’s ironic that most people only see the guaranteed protection and miss the array of benefits permanent life insurance offers throughout someone’s life,” Simbro said.
Depending on the type of policy purchased, life insurance can provide income when you retire. Having funds available during later years can be particularly helpful when covering medical expenses. Furthermore, the coverage can be extremely valuable to those with young families. Funds from a policy can help ensure children will have money for college and other necessities growing up.