Busted Life Insurance Myths
There’s a sea of information about life insurance out there; and with so much information, some of it is sure to get twisted around by word of mouth. You’ve probably heard a lot about life insurance, but what’s true and what’s simply a rumor? We’ve busted three of the most common life insurance myths to help inform your financial decisions.
Myth #1: Empty nesters don’t need life insurance
Many people think that life insurance is only necessary while raising children and paying off homes, after which they may get rid of their policies. At that point in your life, you will probably be in retirement and therefore, no longer earning the income you once were. If you were to die, would your spouse have enough retirement money to live off of? Life insurance provides a financial cushion to keep your spouse afloat in times of hardship.
Myth #2: A life insurance policy should equal twice your annual salary
The size of your life insurance policy should revolve around your family’s needs, and not some one-size-fits-all false notion. While a policy worth twice your annual salary may work for an older couple who has little debt, young families may need significantly more coverage as they raise children and pay off student debts and mortgages. Your independent insurance agent can help assess your needs.
Myth #3: The life insurance you get through work is sufficient
Some employers offer life insurance benefits to staff, which is a great workplace perk. However, it should not be used as one’s only source of life insurance simply because benefits are often capped at one to two times your annual salary, which often is not enough coverage for your family. Fortunately, you can purchase your own life insurance privately to supplement what you already earn through work.