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Top 5 Life Insurance Myths Life insurance can be tricky to figure out with all its technicalities and rules. This article will briefly examine the top 10 misconceptions surrounding life insurance to make the road to coverage a little smoother. Myth #1: I'm Single and Don't Have Dependents, so I Don't Need Coverage Even single people need at least enough life insurance to cover the costs of personal debts and medical and funeral bills. If you are uninsured, you may leave a legacy of unpaid expenses for your family or executor to deal with. Plus, this can be a good way for low-income singles to leave a legacy to a favorite charity or other cause. Myth #2: My Life Insurance Coverage Only Needs to Be Twice My Annual Salary The amount of life insurance needed depends on each person's specific situation. There are many factors to consider. 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 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 #3: My Term Life Insurance Coverage at Work Is Sufficient Maybe, maybe not. For a single person of modest means, employer-paid or provided term coverage may actually 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, additional coverage may be necessary. Myth #4: The Cost of My Premiums Will Be Deductible Afraid not, at least in most cases. The cost of personal life insurance is never deductible unless the policyholder is self-employed and the coverage is used as asset protection for the business owner. Then the premiums are deductible on Schedule C of Form 1040. Myth #5: I Must Have Life Insurance at Any Cost In many cases, this is probably true. However, people with sizable assets and no debt or dependents may be better off self-insuring. If you have medical and funeral costs covered, life insurance coverage may be optional.