8 Misconceptions about Life Insurance Shattered

admin | September 15, 2013

Life insurance is one type of insurance that people do not feel very comfortable talking about. Choosing a life insurance policy requires a person to consider what will happen when they pass away. No one really wants to think about this, but it is important and necessary. Life insurance policies ensure that your loved ones will be taken care of should something happen to you unexpectedly.

When it comes to choosing a life insurance policy it is extremely important to compare life insurance quotes. There are many different term life insurance rates available from different companies and in order to get the best policy at the best price you will need to look into several term life insurance quotes. For more about life insurance quotes click here.

There are several misconceptions about life insurance that you should research and consider before purchasing your policy. Here are some of the biggest myths about life insurance.

1. I’m Single with no Dependents I do not Need Life Insurance

Even if you are single and do not have any dependents, it is still a good idea to have a life insurance policy that will at least cover your funeral and medical expenses as well as your personal debts. If you do not have any life insurance in place this financial responsibility will be left to your family to pay for. In addition, this is a way for a single individual to be able to leave money to a cause or favorite charity that they are fond of.

2. I have a Life Insurance Policy through Work so I do not need Additional Insurance

While having a life insurance policy through your employer is great, often times it is not going to be enough to take care of your family should something happen to you. Term policies offered by employers may be enough for a single individual that lives modestly, but for someone with a family the modest policy offered through work is not going to be enough.

3. Premium Costs can be Deducted

Unfortunately, the price of life insurance premiums is not deductible in most cases unless the person that holds the policy is self-employed. The coverage has to be used as a way to protect the assets for the owner of the business. In this case the premiums can be deducted using Form 1040 schedule C.

4. My Life Insurance Policy Should be Twice my Yearly Salary

For some people a policy that is twice their annual salary will be enough. However, every person is unique and this is not a formula that can be used for everyone. There are several factors that need to be considered when determining the appropriate amount for your policy. In addition to the funeral and medical costs you may also have to pay debts including mortgages, credit card bills, and other loans.An analysis of your cash flow can be conducted to determine an appropriate amount of life insurance.

5. Term Life Insurance is the Best Option

In many cases a term life insurance policy is going to be the best choice. However, it is not always the best option. One of the problems with term life insurance policies is that the rates can become really high later on. With a whole life insurance policy it is possible to lock in lower rate when you are younger. Whole life insurance policies can also be used as a form of investment. Term life insurance policies are great for many reasons and offer a lower premium for those that are on a tight budget.

6. Only Breadwinners Should have a Life Insurance Policy

This is absolutely not true. The costs to replace the service that is provided by a stay at home parent can be quite high. Having a life insurance policy in place for a stay at home parent makes sense especially when considering the costs of cleaning and day care.

7. Life Insurance Policies Cost too Much

Many people believe that they simply cannot afford a life insurance policy. However, the price of term life insurance policies is quite low. For about a dollar a day most people will be able to pick up a life insurance policy that will protect their family should something happen.

8. I have Medical Issues so I cannot find Life Insurance

Most life insurance companies will sell policies to individuals with a range of medical issues. There are some companies that specialize in high risk policies. While the cost may be a bit more, there are life insurance companies that will work with your needs to ensure that you get a policy that you can afford and that will protect your family from the medical and funeral expenses should something happen to you.

Life insurance is something that is necessary. While it is not pleasant to discuss, it is important to make sure that you are not leaving behind debt that you family will have to take care of should something happen to you.