62% of consumers in the United States claimed to have life insurance in a 2013 study. That number has almost certainly gone up with the increased awareness around the benefits a quality policy can offer.
Life insurance can help pay a loved one’s final expenses. It can help replace lost income. It can even act as an inheritance to children so they can pursue their college education.
With the growing popularity of life insurance, there have also been a lot of myths circulating in regard to holding policies. To help make clear what exactly life insurance is and what it can do for you, our team has put together this article.
In it, we’ll examine 8 of the most common life insurance myths and debunk them with life insurance facts!
1. You Only Need Two Times Your Salary in Coverage
It’s a common number thrown around… “Two times one’s pay is more than enough life insurance coverage.”
While that figure may be true for some, it can leave a large number of policyholders dangerously unprotected. How much life insurance coverage you have should directly mirror the kind of lifestyle you and your family enjoy.
Are you paying down a mortgage? Do you have multiple cars that you’re making monthly payments on? Will your kids be going to college soon?
All of those factors and more should be what influences the amount of coverage you get.
2. Life Insurance is an Absolute Must
In many cases, we’d agree with you here. Life insurance provides a lot of protections that the vast majority of policy holder’s loved ones would benefit from if the worst were to come to pass.
Still, there are some situations in which life insurance may not be worth it. A life insurance fact that many policy sellers don’t like to disclose is that if you’re a single person with no debt and nobody counting on your income, you MAY be better off just putting money into a savings account than paying into a policy.
Be sure to adequately assess the cost of insurance versus the burden of your passing to determine if forgoing insurance makes sense.
3. Life Insurance Premiums Are Tax Deductible
While this would certainly be nice, the life insurance facts here are that your deductibles will most often have no impact on your taxes. There is some gray area though.
If a life insurance policyholder is self-employed, they could deduct coverage by saying that it’s asset protection because the business owner is an integral part of the company. That being said, for the majority of people, there will be no tax benefits to getting a life insurance policy.
4. I’m Too Old for Life Insurance
It’s true, the older you get the more complex it can be to get a good life insurance policy. There are however policies designed for people to opt into all the way up to the age of 89!
That will almost certainly be more than adequate enough for most elderly people looking to opt into a policy. Find out more about life insurance for seniors over 80 today!
5. Coverage Through Your Place of Employment is Sufficient
Many employers are offering life insurance policies as part of their perks packages these days. You should be wary of solely relying on these without careful analysis.
Many employer-paid plans are cut-rate and only provide for the most basic of needs. That may mean your family being able to cover your funeral expenses but not being able to settle your debt or replace your missing income.
6. Stay at Home Husbands or Wives Don’t Need Life Insurance
This is absolutely false. The life insurance fact for this myth is that homemakers provide a tremendous amount of value to a household. A value that could be costly to replicate for a family that’s just getting by.
Think about it, homemakers tend to manage the household and the children while the other parent is working. How much would it cost the working parent to pay for child care and deal with household issues if the homemaker were to disappear?
The figure could be extraordinary.
7. Investing in Markets is Better Than Investing in Insurance Coverage
This is a dangerous mindset. Markets are extremely volatile. That volatility is the last thing you want your family’s future hanging on.
Alternatively, life insurance policies are stable. That means you can go to bed each night being confident that your family’s future is secured.
8. I’m Too Young to Worry About Life Insurance
Young, old or in-between, if you have people relying on you or would leave behind a burden to loves ones if you were to pass away, you need life insurance.
Furthermore, the younger you are the cheaper your policy will be. Insurers look at healthy young people as low-risk customers and consequentially, give them much lower deductibles than they would older clientele.
You’re never too young for a policy. Keep your loved ones safe no matter what your age is and find a quality one for yourself, today!
Wrapping Up Myths and Life Insurance Facts
There are a ton of life insurance myths that commonly make their rounds. It’s important that, rather than relying on misinformation, you seek out life insurance facts to make sure you don’t end up under covered or without coverage at all.
To that end, we recommend taking to heart the life insurance facts listed above.
Remember, life insurance coverage should give your family complete security in your absence. Always buy an insurance policy that achieves that end.
Cutting corners today could be an unimaginable hardship for your loved ones tomorrow.