There are a lot of myths and misconceptions when it comes to life insurance.
You need to know the truth when it comes to what you are purchasing, dont just assume based on rumors youve heard. Mistakes made when buying life insurance have long-lasting consequences. If your family isnt provided for as they need to be, you wont be here to fix it.
You need to choose the life insurance that is right for you. You can do so by avoiding these seven common myths:
Myth #1: You should buy seven times your annual earnings.
The rule of thumb that says you should have so many times your annual income isnt necessarily true. The average American has a policy three times his or her annual income. Your dependents should be able to withdraw 5% each year from your insurance policy money without having to touch the principal. If you are making $60,000 annually and you purchase three times your annual income, you have an $180,000 policy. This means your heirs will only be able to withdraw $9,000 each year.
Most people have less coverage than they need. To calculate the amount you actually need, estimate how much your heirs will need to maintain their lifestyle...
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