Busting The Top 10 Insurance Myths (A Slide Show)

Written on July 27, 2010 – 2:53 pm | by Brayden Sani

Call them rumors, fables or simply strangely-brewed factoids, it’s confounding how the plain facts about life insurance have fostered a mythology of misinformation. Today, the Internet has brought crystal clarity and straight-laced information to the subject of life insurance with resources like the Efinancial E-Learning Center and Life insurance Frequently Asked Questions. But not so very long ago, the soapy pitches that characterized life insurance sales were a hatchery for goose eggs like the Top 10 Insurance Myths that appear below.

Investopedia, a Forbes company, has produced a slide show of these myths with a capsule debunking of each, and a few useful links. A real hit-or-myth proposition

Myth No.1: I Don’t Need Coverage, I’m Single With No Dependents
What’s that? You’ll have no debts, medical or funeral bills? Are you sure?

Myth No.2: I Only Need Coverage Equal to Twice My Salary
See above, then add mortgage and family.

Myth No.3: My Term Life Insurance at Work Is Sufficient
Not for everyone. Did you include estate taxes, spouse and children?

Myth No.4: The Cost of My Premiums Will Be Deductible
Not unless the policyholder is self-employed and the coverage is used to insure the business.

Myth No.5: I Absolutely Must Have Life Insurance at Any Cost
Probably true, but without debt or dependents, not always.

Myth No.6: I Should ALWAYS Buy Term and Invest the Difference
If you know you must be covered in later years, permanent coverage may be a better idea.

Myth No.7: Variable Life Is Better Than Straight Universal Life
Market performance and account fees can debunk this myth.

Myth No.8: Only Breadwinners Need Life Coverage
If the deceased is a homemaker, the costs of daycare and household management are substantial to say the least.

Myth No.9: I Should Always Purchase the Return-of-Premium Rider
A cash-flow analysis will reveal the truth, or falsity, of this myth.

Myth No. 10: I’m Better Off Just Investing My Money
In a word…Hogwash!

Easy Click Insurance