We’ll do anything to protect our loved ones, right? But the decision to buy life insurance is often met with hesitation, confusion or even denial. After all, it’s not an easy subject to think about: What would happen if you were to pass away? When it comes to protecting your loved ones, don’t fall for these life insurance myths.
MYTH 1: I’M SINGLE, HEALHTY, MARRIED WITH NO CHILDREN, SO I DON’T NEED LIFE INSURANCE.
Even if you are in this group, life insurance is important. Life insurance may help your loved ones pay off your debts (like some private college loans, for instance) if you pass away. Planning early not only helps protect your loved ones from burdensome expenses, but it also gets you started on a financial plan for the future.
MYTH 2: I CAN’T AFFORD LIFE INSURANCE.
According to the 2015 Insurance Barometer study conducted by Life Happens, 80% of consumers misjudge the cost of term life insurance. Life insurance can be very affordable for many people, depending on the coverage you’re looking for. You can start with a policy that fits your budget, and you may be able to purchase additional coverage later on.
MYTH 3: I HAVE A LIFE INSURANCE POLICY THROUGH MY JOB. IF I TAKE ANOTHER JOB OR GET LAID OFF, I CAN TAKE THE POLICY WITH ME.
Typically, your employer-offered life insurance policy isn’t portable — meaning if you leave your job, you’re probably also leaving your life insurance protection behind. However, when you buy your own, separate life insurance policy you decide how long you want to be covered. Additionally, with an individual policy, you may be able to get more personalized coverage that fits your financial needs.
MYTH 4: MY BENEFICIARIES WILL HAVE TO PAY INCOME TAXES ON THE PROCEEDS FROM MY LIFE INSURANCE POLICY.
Your life insurance death benefits are generally income-tax-free and do not have to be reported, according to the International Revenue Service (IRS). Life insurance helps provide your family with income-tax-free money to help pay for a number of things like funeral expenses, a mortgage, or college tuition.
MYTH 5: I HAVE A COMFORTABLE AMOUNT OF SAVINGS, SO I DON’T NEED LIFE INSURANCE.
While your savings may last through your retirement, have you thought about final expenses? According to the National Funeral Directors Association, the national median cost of a funeral with a burial in 2014 was $7,181. If you don’t have enough money saved, it is possible your loved one won’t be able to pay off final expenses. Keep in mind, if your mortgage has not been paid off, your loved ones may not be able to hold onto your home, if not enough money has been saved.
No matter where you are in life, it’s important to help protect your loved ones and your assets with life insurance. If you have any questions, contact your local Flowers Insurance agent today.