People love myths. They love reading them, they love telling them and, most importantly, they love to believe them, even though these myths most of the time turn out to be false. There are myths out there for everything, including life insurance. This article will look at seven of the most common life insurance myths and tell you what to do so that you remain safe.
1. I don’t need life insurance if I’m single
Just because you’re not married or you don’t have any children, it doesn’t mean that you should ignore the benefits that come with having a life insurance. In case of an unexpected death, life insurance can help pay off your debt and other expenses, so that your family doesn’t have to deal with financial problems as well as emotional ones.
2. It’s better to invest your money than to buy life insurance
You’ll never hear me to say “no” if you know something that can turn you into a millionaire by the end of the week. But, unless you did actually find the key to success, investment is still a gamble.
When it comes to money, nothing is guaranteed. However, death is something that will definitely happen at some point in time. If it happens sooner rather than later, and you have no coverage, your family will suffer, not just emotionally, but financially as well.
3. Only those with jobs need life insurance
It’s not all about making money. Someone has to take care of the home and children as well. Replacing one such person is harder than you think, and the costs of replacing the services provided by them are also higher.
4. Life insurance is a must have, no matter the cost
This is not always so. If you have no debt, a good financial situation and no dependants, you may not need it. Just make sure that you have medical and funeral costs covered.
5. Premiums are deductible
Unfortunately, this is not true, at least in most cases. The cost of personal life insurance is deductible only if you are self-employed and you use the coverage as asset protection for your business. In such a situation, the premiums are deductible on the Schedule C of the Form 1040.
6. Term life insurance coverage at work is enough
This myth is a maybe. If you’re single, it might be enough. But things change if you have a spouse and/or other dependants. Additional coverage may be necessary if the term policy does not meet the needs of the policyholder.
7. Your coverage needs to be twice your yearly salary
This is one of my favorite life insurance myths. And maybe not just mine, because a lot of people seem to really believe it’s true. It is false. The amount of life insurance you need depends on your specific needs. So think long and hard about your situation before getting life insurance. Do you have debt? Will your family be taken care of once you’re gone?
Getting life insurance is a serious matter. It can take care of your loved ones once you’re gone. Remember that. That’s why it’s so important to ignore all these life insurance myths and do your homework before shopping for a policy.