Myth # 3: My Life Insurance Coverage Needs Only Be Twice My Annual Salary

How much coverage each person needs, cannot be generalized, it varies from person to person and their financial situations. There are many factors to consider. In addition to medical and funeral expenses, you may need funds to pay off debts such as home, car or property loan. In case you have some debts to repay, you must do a cash flow analysis in order to arrive at the true amount of insurance that must be purchased - the days are far gone when calculation of one’s life coverage was only on his/her income-earning ability.

Myth # 4: I Absolutely MUST Have Life Insurance at Any Cost

This is probably true to a greater extent. However, people with sizable amount of assets and no debt or dependents can choose to be un-insured. Especially, if one has an adequate resource to pay for his/her medical and funeral cost, he/she shall be better off self-insured. Here life insurance coverage is not a necessity but an optional choice.

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