3 Myths About Life Insurance

3 Myths About Life Insurance
It may seem simple on the surface, but there are many misconceptions about life insurance, and some people still believe them. Here are several we can debunk:

Myth 1: You’re better off investing your money than buying life insurance. This is the “self-insurance” myth. It holds that by investing your money and letting it grow, you’ll ultimately accumulate so much money that life insurance isn’t needed – and, if necessary, you’ll be able to access it before you pass away.

In fact, it may take you a while to accumulate the money you need (and doing so isn’t guaranteed, given market volatility), and until that point, you’re at risk. Self-insuring is taking a big chance, particularly in the early years of your life. You could die without coverage, leaving your dependents in a difficult situation.

Myth 2: Your life insurance coverage should be twice your annual salary. It would be nice to have a simple guideline for determining how much life insurance you need. In fact, there are many factors to consider: Do you need to pay off debts, such as a mortgage and/or a car loan? Will you have medical expenses? Are you the primary bread winner in the house?  Do you have children to provide for?

A cash flow analysis will help determine the ideal amount of life insurance to purchase so your coverage will be based on all factors, not just your income-earning ability.  Each person has their own unique life insurance needs.

Myth 3: Your premiums are tax-deductible. In almost all cases, this simply is not true. The only way life insurance can be considered tax-deductible is if the policyholder is self-employed, and the coverage is used to protect the assets of his or her business – a rare situation.

These are just some of the more common misunderstandings about life insurance, but they aren’t the only ones. Your insurance agent can help you identify other myths and ensure you truly understand life insurance before you make the decision about whether you need it.

 

If Medical Disability Strikes, Are You Prepared?

According to recent surveys, one-third of higher-income Americans ($75,000 and up) are living paycheck to paycheck, and MarketWatch recently reported the average family has less than $1,000 saved.

Even if you have health coverage, a critical illness such as cancer, stroke, or heart attack would reduce your family’s income by about $12,000, eHealth online suggests.

Being unable to work can create a significant income gap. You usually only receive about 60% of your salary from group long-term disability insurance furnished by your employer.

However, there are two forms of insurance that can protect you and your family in the event of a critical illness or a work-stopping disability.

Critical Illness Insurance (CII) and Disability Income Insurance (DII) help provide your family with a strong financial safety net.

After a major covered health event like cancer, kidney failure, or a heart attack, CII supplements typical health insurance coverage, providing a lump-sum payment to defray out-of-pocket costs and lost income.

DII covers the most common causes of disability, including illnesses and serious accidents, and pays a monthly benefit covering part of your salary, bonuses, and commissions. It helps you meet your expenses while you can’t work.

Many Americans will be working longer than they had planned. As we age, the likelihood of an illness-related disability or a work-related disabling injury increases.

No matter what your age, a disability or critical illness can cut short your career and financially devastate your family.

With CII and/or DII, both you and your family will be glad you planned ahead.

Recipe: Turkey Sausage and Pea Linguine
Serves 4
2 tablespoons olive oil
1 pound turkey sausage, casings removed
1 pound fresh linguine
3 tablespoons butter
10 ounces fresh peas
1 tablespoon minced fresh tarragon
Parmesan cheese
Directions
Bring a large pot of heavily salted water to a boil.

Add olive oil to a large skillet. Add turkey and cook at high heat while breaking up any large clumps.

Season with salt and pepper and continue cooking until lightly browned and cooked through.

Cook fresh pasta in boiling water for 2-3 minutes or until al dente. Reserving 3/4 cup of the cooking water, drain the pasta. Add cooked pasta to the turkey along with the butter, 2/3 cup of the reserved cooking water, and peas. Combine all ingredients until heated through. If too thick, add a tablespoon at a time of the reserved cooking liquid.

Add the tarragon and grated fresh Parmesan right before serving.

March 24th, 2016 by Lightship Insurance