Purchasing life insurance can often seem like a confusing and overwhelming process. This is usually in part to misunderstandings about the importance of obtaining a life insurance policy that fits your families budget and needs. This article aims at debunking some of those myths that are preventing you from choosing a policy.
If you haven’t already attained a life insurance policy, it is probably because of some of the misconceptions you’ve heard. One of the most common assumptions is that life insurance is a waste of money. Most people are surprised to find though that the annual costs are generally affordable. Policies can be customized to fit your budget and leave your dependents with some financial security in the event of a death. This is why it is important that you are properly informed about what life insurance really entails.
Below are common myths about life insurance and the facts that debunk them:
I Can’t Afford Life Insurance.
The cost of life insurance is frequently overestimated. Life insurance is designed to be affordable for all demographics. Policies are tailored based on an individuals needs and budget, and is largely dictated by the type and amount of coverage you seek. Even better, is the flexibility you have to start with a policy that fits your budget and later purchase additional coverage. Its completely customized for you.
I’m Single Or Married But Have No Children, So I Don’t Need Life Insurance.
Sadly, deaths often come unannounced. Even if you don’t have a spouse or dependents, death benefits proceeding from life insurance can be used to pay off your debts and protect your loved ones from burdensome expenses after you die.
I Won’t Need Life Insurance Once My Children Become Adults.
Take a look at your estate and debt profile. Purchasing life insurance may help to relieve your children of the burden of paying for final costs, paying for state property taxes, and paying off any debt you may have left behind. Life insurance can also mean that you’re leaving an inheritance for your children and grandchildren.
I Have A Comfortable Pool of Savings, So I Will Not Need Life Insurance.
What about final expenses and mortgage? According to the National Funeral Directors Association, the national median cost of a funeral with a burial is about $7,640. Loved ones left with an expensive mortgage can also be at risk of losing their home if you don’t have enough money saved in the event of a death. A life insurance benefit can help alleviate this burden.
I’m A Stay-At-Home Parent. I Draw No Income. I Don’t Need Life Insurance.
Life insurance is still important for a stay-at-home parent. Consider the cost of services that you provide; child care, laundry, daily transportation, delivery, home maintenance, and cooking services. To replace these services could cost thousands of dollars annually. So, in the event of your death, life insurance benefits may help your spouse cover some of these newly incurred costs.
I Have A Life Insurance Policy Through My Job. If I Switch Jobs or Get Laid Off, I Can Take the Policy with Me.
Realistically, your employer-offered life insurance policy isn’t portable. So if you leave your job, you’re probably also leaving your life insurance protection behind. However, when you buy your own life insurance policy, you can decide for how long you want to be covered. Also, your own policy enables you to get more personalized coverage that fits your financial needs.
My Beneficiaries Will Have to Pay Tax on the Proceeds from My Life Insurance Policy.
Internal Revenue Service (IRS) says that your life insurance benefits are generally income-tax-free and do not have to be reported on your tax return. This means that if you pass away, your beneficiaries would not be taxed on the pay-out, except the tax on any interest payments on top of the policy.
Life can be unpredictable. Make sure that you secure your future with the right life insurance coverage. The experts at Burton A. Harris Insurance Groupare there to make sure that you have the right insurance in place. We are ready to assist you with all your coverage needs.