Debunking Common Life Insurance Myths

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Revision as of 03:48, 7 December 2017

The insurance industry is rife with misunderstanding and confusion, and many people will readily admit that they do not know much about life insurance even though they have a policy. Trying to understand this vital service is not made easier by the falsehoods that are often propagated as truths. It is important to debunk some of the myths out there so that you can understand how to get the best coverage.

Those without dependents do not need insurance

This is by far one of the most common myths. Many single people believe that they do not need coverage because they do not have children depending on them. Life insurance is not just to help dependents financially; it can also come in handy to pay off personal debts including mortgages, and to pay for medical and funeral expenses among other needs.

Insurance coverage should be double the annual income

The amount of coverage you need will depend on your specific circumstances. There is no hard and fast rule as people have different needs and obligations. You should look for a policy that is tailor made for your requirements. Analyzing your cash flow will give you a good idea about the amount of insurance you need. Understanding all the factors is the only way to come up with the best plan.

The work insurance plan is sufficient

Some people believe that if they have a work insurance plan, they do not need additional coverage. While this might be so for someone who is single, if you have a family the coverage provided by your employer may not be adequate. Consider all your needs including the number of dependents you have to determine the additional coverage that you should buy.

Only family breadwinners require insurance coverage

While it is important for the main breadwinner to have insurance, it is not true that this is the only person who needs coverage. Most people do not realize the cost of trying to replace the homemaker. A stay-at-home parent plays a vital role in the welfare of the family. The death of the homemaker can have huge financial consequences for the family when you think about the high cost of childcare.

There are other myths and they include the belief that term coverage is always the best option, life insurance for elderly is not necessary and it is better to invest money than to buy life insurance. When buying a policy, make sure that you get all the information that you need so that you can make the best decision.

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