5 Misconceptions About Life Insurance

Life insurance is something that everyone should have, but many people don’t quite understand.  In honor of Life Insurance Awareness Month, let’s take a look at some common misconceptions about life insurance.

I don’t need life insurance because I don’t have dependents.

Even if you don’t have kids, you should have enough life insurance to cover your final expenses and debts.  If you don’t, you family or executor will have to deal with them.

I have enough life insurance through work.

Maybe.  In many cases, your work probably provides enough term life insurance if you’re single.  If you’re married and or have dependents, it’s very possible you might need more.  Give us a call and we’ll look at your employer coverage to see if you might want to consider supplementing it.

Life insurance should be twice my annual salary.

Maybe, maybe not.  Do you have a mortgage?  How much debt do you have?  What about outstanding medical bills?  Sometimes those add up towards the end of life, and you might not have thought about accounting for medical bills.  What kind of income and expenses will your spouse or kids be facing in your absence?

The point is that two years’ salary might be enough to cover a good bit, but you might want to plan on leaving more.  We can discuss your cash flow and help figure out how much you might want to consider for life insurance.

If I’m a stay-at-home mom, I don’t need life insurance.

You still provide a service with a tangible value.  If you take care of the kids while your spouse goes to work, what will happen if something happens to you?  Most likely, your spouse will have to hire a babysitter or send the kids to daycare.  That has a cost that life insurance can help defray.

Investing is a better use of my money than life insurance.

Unless you have very large assets and very little debt, you are probably better off with life insurance.  Let’s be honest: investments can be very lucrative, if you have enough invested and do it right.  Depending solely on investments early in your life is just plain risky, and unless you’ve got a million or more in assets, you’re most likely better off with life insurance.

There are other common misconceptions about life insurance, but these are some of the more popular ones.  To get a better understanding of what life insurance can do for you and how it’s important for your loved ones, contact us.

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