No one likes thinking about their own death and decisions about life insurance can be very complex. Every person’s situation is different and there are a lot of variables that must be considered to determine the proper type and amount of coverage. Unfortunately, it’s common for many people to make uninformed decisions based on prevailing beliefs about how insurance works. Here are four dangerous (and common) life insurance myths, busted:
I Don’t Have Any Dependents, So I Don’t Need Life Insurance
Even if you’re young, single, and don’t have dependents, your loved ones will still incur expenses after your death. If you have enough assets to cover your debts, potential medical bills, and funeral expenses, then you may not need life insurance. If not, you may be leaving behind years of hassle for your family or loved ones. If your life insurance needs are limited, consider getting a small policy that will cover your final expenses.
Term Life Insurance Is Always A Better Deal
Term life insurance is designed to offer coverage for a limited number of years and retains no cash value. The problem is that once that term expires, you have no life insurance coverage left. Though you may be able to buy a term policy when you’re young for a lower cost than permanent life insurance, you may find that replacing that term coverage later in life can become very expensive, especially if you have health issues. Consult a qualified insurance specialist who can run the numbers on different coverage options to help you understand what the total cost of premiums would be.
My Family Will Only Need A Few Years Of My Salary
The amount of life insurance coverage you will need depends entirely on your family’s financial situation, and there are many variables that you need to consider. Your current assets, debts, future family plans, and expected funeral expenses are just some of the factors we consider in a life insurance analysis. However, if you have dependent children, a mortgage, or significant other debts, it’s likely that your family would need more than a few years of your salary in the event of your death.
Only The Family Breadwinner Needs Insurance
While it’s critical to your family’s financial wellbeing to get adequate coverage for the primary earner, don’t forget about the contributions made by a secondary earner or stay-at-home parent. If your family doesn’t have extra income to spare to cover childcare, housekeeping, and all the extras your spouse provides, you should strongly consider getting life insurance for both of you.
If you would like help with your insurance, do not hesitate to contact our office.
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