Purchasing life insurance can be a challenging process; most individuals are either hesitant, in denial, or do not fully understand their insurance policies.
After all, it’s a big decision, one that requires you think about the circumstances after you pass away.
Life insurance is about protecting your loved ones, which is why it is important that you know facts from myths. This guide will help you make informed decisions about purchasing a life insurance policy.
MYTH: I don’t need life insurance because I’m single (or married with no children)
Truth: Life insurance is equally importance to people who are single, married, and/or with children. It is not only purposed for financial backing for your dependents. The policy can support your loved ones in paying off their debts such as fulfilling college loans, and protect them from the burdens of hefty investments.
MYTH: I can’t afford life insurance
Truth:According to Life Happens’ 2015 study, 80% of consumers perceive the prices of term life insurance higher than they actually are.Depending on the coverage, life insurance can be quite accessible for many people. You can fit your life insurance to your financial limits by designing a policy according to your budget, and purchase additional coverage later on.
MYTH: Taxes from my life insurance policy will have to be paid by my beneficiaries
Truth:According to the IRS, death benefits of your life insurance policy are typically income-tax-free, which means your beneficiaries have no obligation to report them.
Life insurance is an income-tax-free source of money for your family to pay for various expenses such as funeral costs, college tuition, or even a mortgage.
MYTH: I don’t need life insurance as I have enough savings
Truth:Regardless of whether or not you have a good amount of savings, your financial situation can be pretty unpredictable. Even if your savings last you through your retirement, what about additional expenses?
If you do not have enough saved for funeral expenses, it comes to your loved ones to bear the costs. If you did not fulfill any debts such as mortgage payouts, that burden is transferred to your loved ones.
MYTH: I don’t need life insurance once my children are adults.
Truth: Your heirs may be financially independent, but it helps if they have the means to relieve the burden of paying for both yours and their own bigger expenses after your passing. Costs such as funeral charges, state taxes, debts, everything has to be finalized, which is what life insurance is for. Plus, you can leave your children with an inheritance.
For more information on life insurance, consult Gregg Marcus’ blogs. As an insurance executive in New York, Gregg Marcus offers comprehensive assistance to national and international clients. Get in touch with him now.