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5 Common Myths About Life Insurance Needs (Forbes)

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Five common myths consumers should keep in mind when shopping for life insurance:

1. Everyone needs life insurance. Life insurance works best for people who have dependents or a taxable estate.

2. You need life insurance to pay off your debts. Debt that exceeds your estate dies with you unless the debt was joint, community property or had a co-signer/guarantor.

3. Everyone needs life insurance to pay for your funeral or other final expenses. Unless your debt wipes out your entire estate, these policies don’t make a lot of sense.

4. Everyone needs enough life insurance to fully replace their lifetime income. Use a calculator to estimate actual need, factoring in things like the ages of your children and any Social Security survivor benefits your family could receive.

5. You don’t need to worry about your life insurance policy after you purchase it. Life changes, like births, deaths and divorces, can change beneficiaries and the amount of insurance you need over time.

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