Top 5 Life Insurance Myths

Myth #1: No one is dependent on me, therefore I do not need to by it until I create a family.

Even single persons need at least enough life insurance to cover the costs of personal debts, medical and funeral bills. If you are uninsured, you may leave a legacy of unpaid expenses for your family or executor to deal with. Plus, this can be a good way for low-income singles to leave a legacy to a favorite charity or other cause.

 

Myth #2: The costs of my premiums will be deductible. 

Unfortunately, this is not always the case. The cost of personal life insurance is never deductible unless the policyholder is self-employed and the coverage is used as asset protection for the business owner. Then the premiums are deductible on the Schedule C of the Form 1040.  

 

Myth #3: The life insurance that I am receiving from work is all I need.

This can be true in some cases. For a single person without any dependents, you can get by this way. But if you have a spouse or other dependents, or know that you will need coverage upon your death to pay estate taxes, then additional coverage may be necessary if the term policy does not meet the needs of the policyholder. 

 

Myth #4: My life insurance only needs to be twice my annual salary. 

Afraid not.  It is estimated that with both medical and funeral bills, most people need three times to four times their annual salary.  This is especially true if there are any dependents or a spouse, which would need to cover funeral costs, medical expenses, and possibly living expenses.

 

Myth #5: Only the working spouse in the family needs life insurance.

This is not true at all.  A homemaker creates value within the household that would cost quite a pretty penny to replace.  This includes babysitting, cleaning, and possibly cooking.  Do not let the homemaker go unprotected by any means; he or she should be insured as soon as the working spouse is able.

 

To learn more about life insurance, visit our main website at toplifeinsurers.com.