Top 3 Myths about Life Insurance You Need to Know

The following sections work to dispel the three main myths about life insurance.

Myth 1: You only need life insurance if you have children

Most people think that they only need life insurance if they have a family. Life insurance is important for many other reasons.

In short, these other purposes are to support the spouse's income as an investment, a tax haven, and an estate planning tool while the spouse goes through a difficult adjustment process.

Myth 2: Life insurance is a bad investment

Life insurance may not be the most profitable investment you can make with your own money, but it is rarely a bad investment. Life insurance may or may not be a good investment if you value an investment solely on how much you can earn.

When you take out life insurance, you put money in an account to pay survivors the same money, part of that money, or that money, and even more money when you die.

Life insurance is a good investment if your survivors will get more than you invested (or more money than you could earn elsewhere). it's not a good investment.

But life insurance is more than a return on investment. Life insurance offers:

1. Protection of dependents

2. Peace of mind for you

If you're looking for a pure return on capital, you can find more profitable investments, including tax deferred or tax exempt options that can earn you significantly more than a life insurance policy. 

However, the main function of insurance is as a protection, not as an investment. No other investment offers the same degree of protection.

Myth 3: Older people don't need life insurance

Not long ago, older meant "over 50." But many people need life insurance when he is 50, 55, 60, 65 years old. Age is not always a reason to give up life insurance.

Even so-called "elderly" may require survivor income protection if their breadwinner or primary caregiver dies prematurely. People in their 50s and her 60s (and sometimes 70s) are at peak earnings and have family responsibilities.

You can give loved ones time to adjust to your death without changing their normal patterns of life.

Currently, many people in their 50s and 60s continue to support young children. For example, if a woman has a child when she is 40 or she is 42, the child cannot graduate from college until her mother is at least 62. Or you have a non-working spouse who died at age 60. 

You may not be able to find a job that offers a comparable income to maintain the same standard of living.

Many seniors really need more life insurance for several reasons.

1. You may have less time to recover lost income.

2. You may find that inflation is driving down the value of life insurance.

3. As you get older, the need for wealth planning increases because you have less time to plan.

4. The need for tax planning increases with age as incomes are likely to increase and life insurance may play an important role in tax planning.