Life insurance is not a simple product. Even term life policies have many elements that must be considered carefully in order to arrive at the proper type and amount of coverage. But the technical aspects of a life insurance policy are far less difficult for most people to deal with than trying to determine how much life insurance coverage they need in Akron Oh.

What you read will briefly take a look at the some of the most common myths surrounding life insurance and the truths that they distort.

First Myth: I’m single and have no kids, with that being said, I don’t need any life insurance. As a single person there is still the need of at least enough life insurance to cover the costs of personal debts, medical and funeral bills. If you are uninsured, you may leave a burden of unpaid expenses for your family or executor to deal with. Plus, this can be a good way for low-income singles to leave something to a favorite charity or other cause.

Myth No.2: I only need an amount of life insurance coverage equal to twice the amount of my annual salary I earn in Akron Ohio. You need an amount of life insurance equal to the amount that is actually required. In addition to medical and funeral bills, you may need to pay off debts such as your mortgage and provide for your family for several years. A cash flow analysis is usually necessary in order to determine the true amount of insurance that must be purchased. The days of computing life coverage based only on one’s income-earning ability are long gone.

Myth No.3: My term life insurance coverage at work is sufficient. Maybe it is or maybe it is not. For a single person of modest means, employer-paid or provided term coverage may well be enough. But if you have a spouse or other dependents, or know that you will need coverage upon your death to pay estate taxes or create an estate for charity, then additional coverage may be necessary if the term policy does not meet the needs of the policyholder.

Fourth Myth: My premiums are tax deductible. Most often they are not. The personal life insurance premiums, in Akron Ohio are never deductible unless the policyholder is self-employed and the coverage is used to insure his business. Then the premiums are deductible on the Schedule C of the Form 1040. With that being said, the death benefit may then be taxed. So be careful.

Myth No.5: I absolutely MUST have life insurance at any cost. In many cases, this is probably true. However, persons with no debt or dependents and sizable assets may be better off self-insuring. If you have no debt and medical and funeral costs are covered, and then life insurance coverage may be optional.

Sixth Myth: I am always better off buying term and investing the difference. Not always. The cost of term life coverage can become very expensive in the later years, so those who know for certain that they must have coverage until death, should consider permanent coverage. The overall premium outlay for a more expensive permanent policy may be less than the rising premiums that could last for years longer with a less expensive term policy.

There is also the chance of being uninsurable, which could be disastrous for those who may have estate tax issues will use life insurance to pay them. But this risk can be eliminated with permanent coverage, which can become paid up after a certain amount of premiums have been paid and then remains in force the rest of your life.

Seventh Myth: You will always better off buying term and investing the difference. Not always. Term life coverage can become very expensive as you get older, so those who know that they must have coverage until death should consider some form of permanent coverage. The overall premium outlay for a more expensive permanent policy may be less than the increased premiums that could last for years longer with a less expensive term policy.

Poor market performance can even generate substantial cash calls inside variable policies that requires additional premiums to be paid in order to keep the policy in force.

Myth No.8: Only breadwinners need life insurance coverage. That is nonsense. The cost of replacing the services formerly provided by a deceased homemaker can be higher than you think, especially when it comes to cleaning and daycare in Akron Ohio.

Myth No.9: I should always purchase the return-of-premium (ROP) rider on any term policy. There are usually different levels of ROP riders available for policies that offer this feature. Many financial planners will tell you that this rider is not cost-effective and it should be avoided. Whether you include this rider or not, will depend on your risk tolerance and your other possible investment objectives.

A cash flow analysis will reveal whether you could come out ahead by investing the same amount of the rider elsewhere instead of including it in the policy. Riders are available to provide additional benefits that help you customize your policy.

Tenth Myth: I will be better off investing my money than buying life insurance of any kind. Complete nonsense. Until you reach the breakeven point of asset accumulation, you need life coverage of some sort, barring the exception discussed in fifth myth. Once you amass $1 million of liquid assets, you can consider whether to discontinue, or at least reduce, your million-dollar policy. But you take a big chance when you depend solely on your investments in the early years of your life, especially if you have dependents. If you die without coverage for them, there may be no other means to provide for them after the use of your saved assets.

In conclusion, these are just some of the more common mistruths concerning life insurance. The key idea to understand is that you eliminate life insurance out of your budget unless you have sufficient assets to cover expenses, several years after you’ve passed away.