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Top 10 Biggest Life Insurance Myths Debunked

Deciding whether or not to have life insurance is an individual decision. Whatever you decide to do or not do, it’s important to make an informed decision that’s best suited to your family’s needs.

To help you learn more about life insurance, let’s debunk some of the biggest life insurance myths. This post is brought to you by PolicyGenius, a leading life insurance marketplace that helps you compare real quotes in one place.

Top Ten Life Insurance Myths Debunked

If you’re young, healthy, and don’t have any dependents you probably don’t need life insurance. But guess what? You won’t stay that way forever! Time doesn’t stand still and you’re getting older every day. Before you know it you could be married, have a mortgage, start a family, and/or develop a serious health condition.

The ideal age to buy life insurance is in your 30s. You get the best bang for your buck as life starts getting more complicated.

Yet so many people in this demographic don’t have a life insurance policy. They either don’t think they need life insurance, are unaware of the benefits, or have been duped by life insurance myths.

Myth #1: Workplace Life Insurance Is Sufficient

Top firms offer competitive benefits packages including health insurance, dental insurance, life insurance, 401(k) plans with employer matching, etc. Thus, employees who get life insurance through their employer often assume they’re sufficiently covered.

This might be true for frugal folks who are single with no dependents and no plans to settle down. But life changes frequently and time goes by quicker than you may realize.

In reality, the amount of group life insurance coverage offered by employers is rarely enough. If you’re unsure how much you need, please read this guide on the right amount of life insurance coverage. Most employees need 10X the amount of life insurance coverage offered by their employer to properly provide for their families.

In addition, the number of employees who have access to life insurance benefits through their employer has been declining for the past 15 years.

Another important fact is that workplace life insurance policies are not portable. In other words, a life insurance policy offered through your employer terminates if you quit or unexpectedly lose your job.

Thus, gaps in employment can lead to gaps in life insurance coverage when you are financially vulnerable. Having supplemental private life insurance can ensure continuous coverage for your family. And you can get as large or small of a policy as you need.

Myth #2: You Only Need Coverage 2X Your Salary

There’s a common life insurance myth that you should determine how much life insurance coverage to get by multiplying your annual salary by two. This isn’t a great way to calculate how much life insurance you need.

First of all, your specific situation is likely vastly different from your colleagues making a similar salary. And second, there are just too many factors at play to use a generic formula like that.

What is helpful is to use a cash flow analysis of your current and projected spending. Look at how much outstanding debt you have now and if you anticipate making any large purchases such as a car, house, or education expenses.

You should also consider medical bills and funeral costs. Most people don’t realize that funerals can cost tens of thousands of dollars.

Myth #3: Buying Life Insurance Is Overwhelming

While buying life insurance before the internet may have been daunting, it’s easier than ever now. Thanks to technology and insurance marketplaces like Policygenius, you can get free, confidential quotes in minutes.

Even though there are many different types of life insurance, the vast majority of people are best off with term life insurance.

Term life insurance is straightforward and the most affordable. Simply pick a coverage amount ($), a duration (time), pay monthly/yearly premiums, and if you die during the policy’s term (ex. 10, 20, 30 years) your designated beneficiaries will get paid the lump sum of your coverage amount.

Myth #4: Once You Buy Life Insurance, You’re Locked In Forever

In my 20s, I thought life insurance was something you’d be stuck paying for life once you bought it. While life insurance companies would love if that were true, it’s simply not so.

When you buy life insurance, you’re not obligated to pay for it until you die or your term ends. You can cancel your policy at any time, switch carriers, buy additional coverage, and even have multiple policies with different insurers.

Usually, you won’t get better pricing as you age. But, I was able to get more life insurance for less money simply by shopping around. The pandemic and the birth of our daughter spurred me to renew my policy.

Myth #5: Life Insurance Is Expensive

Many people don’t think they can afford life insurance due to the false perception that it’s very expensive. But it’s more affordable than you may think. Here’s a look at how much life insurance costs by age and gender.

In reality, the average 30-year-old male can get $250,000 in coverage for less than $20/month and $1 million in coverage for less than $50/month. An average 30-year-old woman can get the same coverage for around $15/month and $38/month respectively. Women typically pay less than men of the same age due to having a longer life expectancy.

In addition, if you use PolicyGenius to purchase a life insurance policy, you could save $1300 or more per year by comparing quotes from top companies. Insurers routinely drop rates to stay competitive and Policygenius reflects the best prices in one place. This makes the shopping process super easy and affordable.

Myth #6: Buying Life Insurance When You’re Young Is Pointless

When you’re young and healthy, the last thing you’re probably thinking about is buying life insurance. And while you may not need it right now, there are benefits to consider. Life insurance while you’re young, single, and childless, is still a good idea.

When you buy a life insurance policy when you’re young and free of health issues, you’ll get the best pricing.

Every year counts. For example, people in their 30s typically see an average annual price increase of 4.5% each year. This jumps to 7.8% per year for those in their 40s and 9.2% per year for those in their 50s.

Buying a policy when you’re young and healthy locks in a low rate regardless of how your health or lifestyle changes down the road. Nobody expects to get sick or develop health conditions that can jack up their rates. But it happens all the time.

For example, a friend of mine who is in her 30s needed two surgeries in one year. Now that she’s planning to start a family, she wants to buy life insurance. But because of her health changes, she’s facing premiums that are 3X what she was getting quoted just a few years ago.

To avoid running into her situation, it’s important to carefully consider the benefits of life insurance while you’re young and in the best shape of your life.

Also See: Benefits Of Life Insurance For Young Adults

Most common reasons for buying life insurance

Myth #7: A Pre-Existing Condition Makes You Ineligible

If you have a pre-existing medical condition, you may think that automatically makes you ineligible to get life insurance. While having health issues won’t get you access to the best pricing, you can likely still get coverage.

For example, let’s say you have a pre-existing condition like diabetes. As long as you are maintaining your health with medication and a proper diet, you can get life insurance with diabetes.

Conditions like a stroke or cancer, however, may require a two-year waiting period before your coverage becomes active.

Mental health issues are factored into pricing as well. If you have been diagnosed with depression, you can still get coverage if you’re actively managing your mental health. The underwriting team may want to know if you are taking any medications to treat your depression and/or seeing a therapist for support.

Here are some related articles to read more about getting life insurance with a pre-existing condition.

Myth #8: You Can’t Get Life Insurance If You’re Pregnant

Getting life insurance when you’re pregnant, planning to get pregnant, or just gave birth is totally doable. With a precious new life to protect, life insurance will mean more to you than ever before.

Life gets chaotic fast with a newborn in the house, so don’t delay getting life insurance. Many insurers can use your pre-pregnancy weight to determine your rate. Make sure to ask if they don’t automatically offer to.

If you develop gestational diabetes or have complications with your pregnancy, you might face slightly higher rates. But you still should not have a problem getting a policy. Life insurance is about protecting families after all. As soon as you know you are having a baby, getting life insurance is recommended.

Myth #9: Non-Working Spouses With Kids Don’t Need Life Insurance

If you or your spouse is a stay-at-home-parent and/or doesn’t earn a salary, you might think life insurance isn’t necessary. Not true. Taking care of a child full-time is absolutely a job. And it will cost time and money to replace.

Not only are there daycare costs to consider, but you may also want to afford ongoing therapy services for the surviving parent and children. Losing a spouse/parent is traumatic.

Replacing the various responsibilities performed by a homemaker is easier when you have a life insurance policy to fall back on for financial support. And, the surviving working spouse may need to take an extended leave of absence from his/her job to grieve, sort through family affairs, find childcare, and adjust to a major lifestyle change.

Myth #10: Life Insurance Benefits Are Taxable

You may be worried that your beneficiaries will owe a big tax bill on your life insurance benefits when you die. Well, guess what? The vast majority of death benefits are tax-free and do not even have to be reported to the IRS. If you have a complex policy, taxes may be owed to the IRS if it earns interest payments on top of the policy amount.

If you buy a term life policy, which is the most popular type of life insurance purchased today, the benefits are not taxable. After your beneficiaries submit a claim to your insurer after your death, they will literally get a lump sum of cash that they can use however they see fit.

In fact, the higher your income, the more valuable the tax-free death benefit. The higher your marginal income tax bracket, the more you have to make to generate the same amount of after-tax death benefit amount.

See: Life Insurance Tax Questions Answered

Don’t Make My Life Insurance Mistake

Currently, I have a $1 million, 20-year term life insurance policy that will expire when I’m 60. I bought it last year through PolicyGenius when I wanted to double my coverage after having a second child. At age 40, I was able to get a no-medical-exam policy for less than $500/year or $41.50/month.

But funny enough it took me over six years to get a good rate. Why? I just assumed I was getting the best rate with USAA because I already held home, auto insurance, and CDs with USAA.

What I didn’t realize until last year was that I was vastly overpaying for life insurance for six years because I didn’t shop around. To save money on any type of insurance, the recommendation is to shop around every two years.

As soon as I saw how much money I could save through PolicyGenius, I went through the signup process and got double the life insurance with a new carrier for less money.

If you want to buy life insurance, or even just check if your existing policy is priced well, check out Policygenius today for free and with no obligation.

Readers, at what age did you purchase life insurance? Were you aware of the above life insurance myths? Did you make any mistakes with buying life insurance or not buying it for that matter?

Source
Top 10 Biggest Life Insurance Myths Debunked is written by Samurai Sydney for www.financialsamurai.com

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IRS Out For Blood More Than Doubling Penalty Interest

IRS taxes increase

In a blatant act of financial tyranny, the IRS is intensifying its assault on hardworking Americans by shamelessly jacking up the interest penalty on underpaid taxes from a pitiful 3% to an exorbitant 8%. This calculated move, recalibrated quarterly, serves as a stark reminder of the insatiable appetite of the IRS, an oppressive behemoth relentlessly extracting every last penny from citizens already shackled by burdensome taxation.

Specifically targeting non-corporate taxpayers, the IRS demands the federal short-term rate plus an additional three percentage points, a blatant money grab that directly targets struggling self-employed individuals, independent contractors, and gig economy workers. These individuals, already grappling to make ends meet, find themselves in the crosshairs of a government voraciously hungry for more of their hard-earned wages.

For those daring to resist this blatant financial coercion and falling short on their payments, brace for the punitive underpayment penalty. There’s a meager concession – if the amount due is under $1,000 after begrudgingly considering credits and other tax factors, citizens might receive a temporary reprieve from the claws of the taxman.

This audacious maneuver puts the self-employed and independent contractors in the IRS’s oppressive grip, coercing them to make quarterly estimated tax payments under the looming threat of severe financial retribution. The January 16, 2024 deadline for the fourth quarter of 2023 is fast approaching – a date that casts a dark shadow over those grappling with the suffocating weight of government overreach.

While the regular W-2 employees might momentarily sigh with relief as taxes are conveniently siphoned from each paycheck, tax experts issue a stern warning against such complacency. Joseph Doerrer, a CPA and financial planner from New Jersey, challenges individuals to scrutinize their tax situation, posing the provocative question, “Are you where you should be?” A question that echoes as a stark reminder of the government’s overreach into the pockets of hardworking Americans.

One taxpayer, Sameet Durg, found himself blindsided by an underpayment penalty reaching into the thousands – an unwelcome surprise that serves as a chilling testament to the relentless demands of the IRS. Durg, a marketing executive, now watches his finances with unwavering vigilance, refusing to endure a hefty hit come April.

As the IRS unabashedly cranks up the interest penalty, taxpayers are left grappling with the heavy-handed tactics of an agency that seems insatiable in its quest to confiscate more of their hard-earned money. This move underscores the urgent need for citizens to vehemently resist the oppressive tax regime, actively defy the IRS’s overreach, and reclaim sovereignty over their wages.

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GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

(ConcernedPatriot.com) – Sam Bankman-Fried has been found guilty of all charges related to the collapse of his Bitcoin exchange, FTX.

“A New York jury in Manhattan federal court agreed with prosecutors that Bankman-Fried defrauded investors, customers and lenders in connection with the collapse of his crypto empire,” reported Fox Business.

“Prosecutors accused Bankman-Fried, who founded and controlled both FTX and sister hedge fund Alameda research, of misappropriating and embezzling billions of dollars in FTX customer deposits, scheming to mislead investors, and instructing other executives at his businesses to do the same,” it added.

Bankman-Fried was charged with five charges of conspiracy and two counts of wire fraud in the first two criminal trials.

The maximum sentence for each crime was 110 years in prison.

The hearing for Bankman-Fried’s sentence has been scheduled for March 28.

The Southern District of New York’s U.S. attorney, Damian Williams, commended the decision and said that Bankman-Fried “perpetrated one of the biggest financial frauds in American history.”

“The cryptocurrency industry might be new, the players like Bankman-Fried might be new,” Williams said. “But this kind of fraud, this kind of corruption, is as old as time.”

NBC News gave some background information and historical context before the decision:

“FTX and Alameda quickly collapsed in November 2022 after some of their financial liabilities were exposed.

The fact that Alameda had taken billions of dollars from FTX’s customers and that much of Alameda’s balance sheet was comprised of digital currency assets it had created was central to the case against Bankman-Fried.

Unnerved by disclosures about the firm’s financial position, many of FTX’s customers tried to get their money back. That set off the equivalent of a bank run.

The value of Alameda’s investments crashed, and FTX couldn’t return much of that money because it had been given to Alameda. Some went to the fund’s lenders, and billions were spent on sponsorships, commercials, and loans to top executives. That, too, was a major part of the case against Bankman-Fried.”

Following the collapse, more FTX and Alameda executives were prosecuted, including former CEO of Alameda Caroline Ellison, co-founder of FTX Gary Wang, and chief technology officer of FTX Nishad Singh.

All three pleaded guilty, agreed to cooperate, and testified against Bankman-Fried.

In exchange for their cooperation, they will receive less severe punishments.

In his defense, Bankman-Fried stated that he never intended to deceive anyone and that, following the failure of FTX and Alameda, the government had been searching for someone to blame.

“Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him,” Mark S. Cohen, counsel to Bankman-Fried, said in response to the verdict.

Williams stated that he hoped the conviction would be an example for others.

“It’s a warning, this case, to every single fraudster out there who thinks that they’re untouchable, or that their crimes are too complex for us to catch, or that they’re too powerful for us to prosecute, or that they could try to talk their way out of it when they get caught,” Williams said. “Those folks should think again.”

Copyright 2023. ConcernedPatriot.com

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Brutal ‘Bidenflation’ Has 1 in 6 Retirees UNRETIRING

Brutal 'Bidenflation' Has 1 in 6 Retirees UNRETIRING

(ConcernedPatriot.com) – According to an analyst, “Bidenflation” may be a long-term issue, leading one out of every six pensioners to contemplate retiring early.

It will undoubtedly persist if Biden wins re-election.

In the far-left USA Today, Patrice Onawunka laments the possibility that the “financial insecurity” brought on by inflation—which was brought on by “reckless federal spending”—will last forever.

More:

“People have connected the dots between ill-advised government policies and harsh economic outcomes. Spending nearly $2 trillion on government transfers to almost every household during supply-chain disruptions and exacerbated labor shortages caused inflation to accelerate. Putin’s invasion of Ukraine and other production disruptions worsened it.

The Biden administration and congressional Democrats passed a climate change bill that they falsely labeled the Inflation Reduction Act in hopes of fooling Americans, especially seniors.

The bill never addressed rising food, housing, or energy prices — households’ most basic and critical needs. Any climate savings would take years to come to fruition and could be offset by new costs for families — tens of thousands of dollars — on new electric vehicles.

Meanwhile, the green subsidies cost more than three times what the law’s supporters claimed.”

What could be crueler than adopting a law that does the exact opposite and is titled the Inflation Reduction Act?

55 percent of those who have already had to un-retire claim it was because they needed more money.

The White House and corporate media continue to lie to us by promising that the inflation issue will pass quickly, yet nothing ever appears to change.

Everything’s cost is skyrocketing especially housing. Meanwhile, Joe Biden is exerting every effort to keep inflation high. The federal government spends like a drunken sailor, which cheapens money.

Even worse, Biden has permitted countless millions of illegal immigrants to enter our nation, which raises the price of housing by increasing demand for limited items like housing.

Housing is a necessity, Onwuka tells us, unlike other discretionary expenses. Rent costs in America are rising, disproportionately affecting older folks and those with low incomes, especially those on fixed budgets.

In addition, she states that “10 million households headed by people aged 65 or older spend more than a third of their income on housing, and half of these pay more than 50%.”

See what happens when you factor millions of illegal immigrants into the housing problem.

Biden punishes Americans who have lived by the book, paid their taxes, saved money, and worked hard. He is putting the interests of millions of illegal aliens—who raise demand for everything and drive up prices for everything—above the interests of those Americans.

“In a little over four years, I intend to retire. I’ll never be wealthy, but since I started my first 401K in 1994, I’ve been setting money aside for that moment. I enjoy both my job and my coworkers.”

That isn’t the problem. The dream is the problem… the desire to live out your third act with the freedom and resources to do whatever you want.

Similar actions are taken by many working Americans who save money and forgo immediate enjoyment to prepare for their elderly years. As a result, I find it difficult to understand what it must be like to enter a dream before having it destroyed.

The anguish of coming out of retirement, returning to the grind, and facing Monday mornings all over again escapes me.

The only idiots, child abusers, and masochists vote Democrat.

Copyright 2023, ConcernedPatriot.com

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