There are lots of myths involving life insurance. Most of the time it is because people just don’t understand as to what all they need and how much they must pay for life insurance. The technical aspects which involves life insurance is difficult for a lot of people. If you find yourself confused about a few things then you are for sure not alone. Part of the confusion comes from life insurance myths.
Have you heard of these life insurance myths before?
1. Coverage is not needed if I am single and I don’t have to worry about any dependents currently. Did you know that even single people should consider life insurance? You never know what might happen. You should have enough insurance that will help with covering funeral and medical bills or any other expenses that might not be paid. This way your family won’t have to worry about them.
2. One big myth is that life insurance must be twice the size of the annual salary people make. This myth is actually false. The reason why is because your life insurance will change in accordance to the situation that you might be in and there are many other factors that you must consider before you sign up to life insurance. Mortgages might need paying off along with medical bills. Things like that will cause your rate to change and so sometimes it’s good if you have life insurance that is twice the size of the annual salary you make but other times it is not needed.
3. I get term life insurance coverage from my job and that’s plenty for me. Sometimes that is plenty for some people but other times it is not. Single people might find that this is ideal for them but other people might need to get additional coverage depending on their situation.
4. All premiums are tax-deductible. In some cases this is true but in other cases it is not. It all depends on the policyholder and if the policyholder might be self-employed. If that is the case then the coverage can be used for asset protection which would go towards the owner of the business.
5. Everyone needs life insurance. Most people need life insurance but there are some people that might not need it. If you have a sizable asset or either if you might not have debt then something to consider would be self-insuring. Another reason as to why it might change is if funeral and all of your medical bills are paid off or either covered then this is when life insurance becomes optional for you.
6. The difference can be invested because it’s always smarter and better to invest and buy term coverage. This is not always the case. You will find that there is indeed a difference that is distinct between permanent and term insurance. Term life insurance usually gets to be expensive as you start to age.
7. Breadwinners just need to buy life insurance. Now, this one is just total nonsense and not true. It can cost a lot to replace the services that was provided by the homemaker that is deceased. Getting insurance that goes against losing the homemaker actually makes a lot of sense because it helps with being able to compensate for both child-care and the cost of cleaning.
8. A Universal Life Policy Is Better Than The Regular Universal Life Policy. Most of the top universal policies end up having to pay for interest rates in a competitive way. A variety of universal life policies involve a lot of layers with fees that relate to both the security elements and insurance elements of the current policy.
Clearing Up All Confusion On Life Insurance Myths
These are just 8 of the myths which involve life insurance. You will find that there are lots more floating around out there. The thing is that life insurance should never leave you clear straight out of the budget that you have unless if you know for a fact that all of the assets you have might cover the expenses after you have passed away.
Contact your financial adviser or life insurance agent for more information.