Most people are skeptical when it comes to buying life insurance. Is it the life insurance itself? Or the uncomfortable conversation of how to assess one’s financial needs after the death of a loved one? After all, who likes to talk about death? Below are some debunked life insurance myths that can help convert an emotional response to a better thought-out decision-making process to meet needs after the loss of a loved one.
Myth #1 – No One Needs Life Insurance
When a loved one dies, funeral expenses and medical costs can cost thousands of dollars. Almost everyone can benefit from life insurance because the policy will cover those costs. If a loved one passes on with large amounts of debt and has no policy to cover that debt, the burden will fall on their closest relative. It’s necessary to have life insurance to protect the ones you love.
Myth #2 – My Employer’s Life Insurance Policy Has All My Expenses Covered
Employer-paid policies usually only cover one to two years’ salary or just a flat amount. Financial experts recommend at least 6 to 12 times your annual salary to cover expenses your dependents might have. Keep in mind that employer policies end when you leave the company. If you start your own personal policy early, your rate will be locked and will not increase. You also won’t have to worry about it if you lose your job.
Myth #3 – My Lifestyle Won’t Affect My Premiums
The lifestyle of an insurance policyholder is thoroughly examined to assess the risks associated with that person. Factors such as smoking, occupation, location, and weight can all affect premiums. Even having a risky hobby like rock climbing can impact premium rates. If all facts are not disclosed to the insurer, one could lose their coverage when it is most needed.
Myth #4 – The Best Way to Obtain Life Insurance is by Buying Online
It’s possible to find the cheapest quote from online insurance sites, but there are often many hidden costs. The best bet is to compare quotes from real insurance agents to help find the right plan and term conditions. You can contact an agent or compare quotes through this site to determine what plan will meet your needs the best.
Myth #5 – I’m Too Young for Life Insurance
This myth can be pretty costly compared to the other life insurance myths. You’re never going to be as young as you are today, and the younger you are, the better the premiums are. Now is arguably the best time to apply for life insurance. If you have assets or loved ones to protect, life insurance should be a consideration regardless of your age.
Facing the Uncomfortable Truth
Regardless of cost or misconceptions, a lot of people avoid conversations about life insurance because it forces them to think about mortality, financial responsibility, and the uncertainty of life. So, it’s important to consider the emotional hurdles that people have to jump in order to even get to the point where they want to have those conversations.
Additionally, people have a hard time getting over the optimism bias – the belief that tragedy is unlikely to happen anytime soon. We all want to believe that we are young and healthy and the odds of something bad happening are very low. We always assume that we have loads of time left. And while that may be true for some, unexpected events can change everything in an instant. In fact, in 2022, 227,664 people died accidental deaths, making it the third leading cause of death that year. Those people probably thought they had more time than they did. That’s why it’s important not to put off those conversations.
Some also avoid life insurance because they feel discussing finances after death can be cold and impersonal, but in reality, life insurance is one of the most selfless acts of love. It’s you putting the plans in place to keep your family protected in an already difficult time. Shifting your mindset about life insurance is the key – from fear and avoidance to a proactive mindset.
Life Insurance Questions?
We hope that this information on life insurance myths is useful to you.
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This Article Was Updated on 2/18/2025.