Top 5 Myths About Life Insurance

You know those claims you hear about certain things, yet you’re never certain if it’s just people talking hearsay and not providing any sort of evidence as to what they’re saying? Sometimes, you just want to question them to see if they know what they’re talking about.

Well, life insurance is one of those things most people know they should likely have, but a lot of myths surround the topic. Here, we’ll put to rest some of those claims you may have heard about this type of insurance.

1. I’m single with no dependents and don’t need coverage.
You still need enough insurance to cover any personal debts you may have, along with medical and funeral bills that could rack up in the event you’re struck by disaster. You don’t want to leave unpaid expenses to your family or someone else if you happen to be uninsured. Another thing is that you can leave money to a charity of your choice if you do happen to be single with a low income.

2. I must have life insurance at any cost.
You should probably have it in most cases. The thing is, certain individuals with huge assets but no debt or dependents might choose to not insure their lives. If you have funeral costs covered, too, this type of insurance is considered optional.

3. My coverage should be two times my salary.
Your insurance needed is dependent on your own situation, with many factors that need weighed. Not counting your medical and funeral bills, you may also need to pay off a mortgage and even provide for your family over the course of several years. The true amount of insurance you might purchase all comes down to a cash flow analysis. It’s not as easy as doubling your yearly salary.

4. My term life coverage at work is already enough.
It could be, especially if you’re single and your employer’s coverage is decent enough. But if you’re married or have other dependents or know that you’ll need extra coverage upon death, you may actually need a separate policy to help cover the needs.

5. Only the person making the money needs coverage.
This is far from the truth. Even if one spouse is making significantly more money than the other or one is stay at home, there are other factors to consider such as daycare and cleaning costs that the stay-at-home spouse may have been responsible for.

New Year’s Resolution: Insurance

Oftentimes, we make a list of goals, or resolutions, when the new year rolls around. These are meant to get us on track to a healthier, better, more fulfilling life than our time was last year. Because we’re all meant to improve, to get better after reflecting, right? That’s sort of the goal.

So, a lot of these resolutions end up being things like lose weight, or put on muscle, or even to travel more. You know, the ones that end up on everyone’s list of resolutions.

Sometimes, though, you’ll see more unlikely items. People will put their career aspirations on their list. Or financial goals. Or to learn a new language. These are the uncommon goals that have more payoff if reached, but that’s the reason they’re rarer: they’re not as easy to attain.

But when does considering the long term (as in, past this new year and other new years down the road) become a part of our short term? What about the future of our finances? What about our kids that aren’t born yet? Why aren’t some of these things part of our lists of new year’s resolutions?

One that I think should be on everyone’s list (if they don’t have it yet) is life insurance.

Seems kind of out there to put this on your resolution’s list, right? Well, we don’t think so. Having this type of insurance set up poses a ton of positives you’ll have going for you.

To start, life insurance is much cheaper when you’re younger and healthier. So even if you’re not married yet or don’t have kids at the moment, it’s not a bad idea to be on a policy so that your rates will remain fixed for a long time. Rather than paying more in 5 years when you finally do have kids, why not pay less now so that you can save over time?

Additionally, having this insurance is absolutely great if you’re married. You don’t want to leave your spouse hurting even more if disaster hits. Having insurance will at least set them up for financial security if something were to happen.

So, rather than adding another small and useless goal to your list of resolutions that you likely will forget about in a month, why not put a checkbox on there to tick off once you purchase a policy for your life? You’ll be getting a lot more value out of that than most other resolutions.

The Advantages of Getting a Life Insurance Policy

When beginning an investment portfolio, many financial advisors suggest that this should be in the first wave of things you purchase or invest in. However, many people are unaware of the benefits and advantages of owning a life insurance policy. The common trend is that life insurance is for “older folks” who are close to dying and want to make sure that they leave something behind. This could not be further from the truth, as the best time to buy life insurance is when you are young and health. This and the other advantages of owning a life insurance policy are listed below.

The Death Benefit:

The whole life insurance policy assures you a guaranteed death benefit that never decreases and upon death, is usually free of federal income taxes a well as federal estate taxes. This is a huge advantage for those left behind after the person has passed on, as this income can help cover the cost of the funeral and any other expenses that need to be taken care of. Giving your family peace of mind is so important as well. If you were to tie at an early age, although unlikely, the death benefit will provide a huge sum of money to care for your loved ones.

Level Premiums:

Unlike other investments or other types of insurance, whole life insurance premiums remain the same throughout the entire time you own the policy. That is why many financial advisors suggest purchasing a life insurance policy early on in life, as the premiums will never get cheaper than during that time period. Being young and healthy insures the cost being low because you are not likely to pass away anytime soon. Take advantage of that and purchase a whole life policy.

Cash Value and Dividends:

Another advantage of owning a whole life insurance policy are the cash values it produces. At any given time, cash can be “borrowed” by the policy owner for whatever reason he or she should choose. And, if at any time you need to cancel the policy for some reason, you will receive a lump sum of the cash you have accumulated, tax deferred. Some life insurance policies also produce dividends which can be used to gain cash, or reduce some of the next premiums

Great Christmas Gifts

If you are struggling to come up with last minute gifts, it is time to start thinking about what is truly important for each of your loved ones. Some people like to get things for entertainment, others like to get things for practicality, and still others like to get things that can be viewed as investments. Use this holiday shopping guide to help finalize that last minute Christmas shopping.

This is a great year to spend some money and invest in a great entertainment system. Now, you can either choose to get the traditional entertainment system, like a cabinet that will hold the TV and speaker, or you can choose to grab a new gaming console, like the Xbox 1 or Nintendo Switch. Or you can double down and get both, and that way you have a new “entertainment” system, for your entertainment system! The new trend is to get a smaller game system like the Nintendo Switch. The trend in cabinets right now is something that is small, compact, and usually a solid neutral color like dark grey or black. No matter what you decide here, the Switch and the new cabinet will look great with that new 60” TV you just got.

If you are wanting more of a practical gift for someone, you could choose to gift some type of lesson, like piano or golf. This type of gift works well for your children or for a special niece or nephew who you know is trying hard to improve at something. What is great about these gifts is that the lessons can be spaced out for the next six to twelve months, so it is not just a one time that gets used right away. A practical gift could also be getting someone a bunch of plasticware and paper products. This is great for helping them get the house stocked and ready for all of those Christmas and New Year’s parties.

Christmas is also a great time to open a savings account for a child. There is something special about seeing a child’s eyes light up when you hand them their first check. Or, if you truly want to help care for their future, a life insurance policy. While a child may have trouble understanding this in the moment, the benefit of getting a small policy taken out on them could help tremendously in the future. For one, it is a truly a gift that keeps on giving, and two, they really do not have to even think about it. Life insurance will also give you the gift of having peace of mind if something terrible would ever happen to your child as well.