7) Not understanding investment returns and account options
There are two different types of life insurance to choose from—whole and term. Whole life insurance is a permanent policy that’s meant to replace your income if you die. It has a cash value, meaning it includes an investment component that grows over time. Term life, on the other hand, is more straightforward; it’s short-term coverage that only pays out if you die. If you have dependents who rely on your income (such as young children), consider whole life insurance.
8) Believing in myths about disability insurance
Disability insurance is one of those products that seems like a good idea, but most people don’t buy it. If you’re one of those people, stop kidding yourself. The statistics suggest that by not buying disability insurance, you’re effectively taking out a loan from Social Security to cover your expenses in case you get sick or injured.