Life insurance is a product which is favoured by most of the populations. Even though it provides a soft landing to the family members of the deceased, many are apprehensive about putting their money and think that they should be investing in some other lucrative options. But, as a matter of fact, the investments may not reap the expected results, but you can be sure that your family will receive the amount of money you signed for , after your death. This kind of unfavourable opinion towards life insurance rises from a number of life insurance myths. Here we break them down for you, so that you can make an informed decision about the future of your family.
Myth No.1 – I am single so why do I need a life insurance?
One of the biggest life insurance myths is that I am single and I don’t need it. You may not have a family which needs that money, but you yourself may need it. Your personal debts, mortgage payments, medical bills and funeral expenses will get covered up by a life insurance policy.
Myth No.2: The coverage through my life insurance should be double my salary.
If you considering that you’re the coverage should be just about double your annual salary, then this money may end up sooner than you expected. Your medical and funeral expenses will get covered, then your debts would be paid off, so what is left for your family. If have children, who may not be leaving the nest for about 10-15 years, your coverage will definitely not be enough. Your spouse may need more than two years to properly cope with all the loss. So, you coverage should at least last 5-8 years giving enough time to the partner as well as children.
Myth No.3: I MUST have a life insurance policy on my name.
Well, even this is not entirely true. If you are single and have enough assets and you have no debt to pay-off, and your medical and funeral expenses can be incurred by your money, then you may not need it.
Myth No.4: Only I need life insurance as I am the breadwinner of the family.
What if you spouse dies, and the services she did for you and your children like day-care and cleaning and other stuff, will have to be taken from someone else. These services can cost a lot. So, insurance should not be something exclusively for the breadwinner only.
Myth No.5: I should be buying a Term policy and invest my money at other places.
You may think that you will be better off with paying less premiums on the term policy, but then the premiums on such policies increasing later in life. And the premium you may have to pay now seemingly expensive permanent policy may actually be less than the premiums on a less expensive term policy in the long run.
Image credit: blogs-images.forbes.com/