Life insurance is considered to be a financial protection for your loved ones. On different occasions, people get to hear various common concepts or theories about life insurance. The issue is that most of these theories or concepts about life insurance are only the myths that people have spread to create misunderstandings about life insurance. If you are thinking about investing in a life insurance plan then you first need to clear all the life insurance myths and learn the truth behind these myths.
- Most of the people are of the opinion that if a person is single then he wont have to invest in life insurance plan because a life insurance plan would only be effective for you if you have number of dependents. This concept is just a myth because life insurance not only plays the part of an investment for the benefit of your dependents if something happens to you but it also plays the role of your investment that you can make in order to cover your debts, get pension, or cover your funeral costs. Even some of the life insurance plans also provide coverage to the medical bills.
- Most of the people think that the term life insurance plan offered by their employer is enough for them but in some cases this is not the fact. If a person is single and has been covered under the employer-offered term life insurance plan then this life insurance might be enough for him. But if the person is married and has kids then such term life insurance plan would not be enough to cover his taxes, debts or funeral costs. Plus you also have to leave some amount to your wife and kids so you need to get another term life insurance plan.
- Due to increasing trend of life insurance, most of the people are also of the opinion that getting a life insurance plan is must for every person, which is also a myth. If you have sufficient assets, you are receiving high level income, you dont have any dependent, and you have no debts or any other sort of liability then getting life insurance coverage might just be a useless expense for you guys.
- Some of the people are also of the opinion that the premiums they would have to pay would be covered in the deductibles. On the other hand, reality is a bit depressing as premium costs would only be covered in deductibles if you are self-employed because the insurance coverage under the Form 1040 will be treated as business owners asset protection.
- People also have different misconceptions or myths about the life insurance coverage amount. For most of the people, the total amount of the life insurance coverage must be equal to the double of the total annual salary, although this is not the truth. Before deciding upon the total value of your life insurance coverage, you must ponder upon some of the important points such as your debts, mortgage, funeral costs, medical bills, family needs etc.
Before going for the life insurance, you must make a list of all of your financial needs, your monthly income and then go for any particular plan which seems suitable to you.