Debunking Common Myths About Life Insurance

Melissa Matzenbacher-Galan | May 10, 2023 | minute read

Debunking Common Myths About Life Insurance

Life insurance offers financial protection for an insured’s beneficiaries. Yet a common myth is that is all a life insurance policy can do. Lesser-known reasons for purchasing life insurance policies provide income for retirement, funds for a critical illness or disability and weather market volatility.  

We’ve come up with 10 common myths about life insurance to inform you about who is a candidate for life insurance and how life policies can serve other purposes in your life. 

1. Life insurance is unaffordable 

A Life Insurance Marketing and Research Association (LIMRA) study showed that 50 percent of Americans believed that the premiums for a term life insurance policy were three times the actual cost, and younger Americans believed a term life policy was up to five times more costly, so it’s best not to make assumptions.  

As of 2021, there were more than U.S. life insurance companies. Each insurer offers different life insurance policies, and applicants will find a variety of affordable pricing among them. A term life of joint life policy may be more affordable than a whole life insurance policy if finances are an issue.  

2. Only older people need life insurance 

Older people are more likely to be thinking about life insurance because they are starting to have health concerns. Life insurance is necessary for anyone, regardless of age, who has dependents relying on them financially. In the event of the financial provider's death, their loved ones may require financial support to maintain their current standard of living. 

3. Only people with children need life insurance 

Adults without children may need life insurance whether they are married or single. Life insurance can help pay the mortgage, car payment, or other bills if one partner passes away. Single parents may need to leave funds behind to care for their children. Any adult who dies unexpectedly may need to leave behind finances to support their aging parents.  

4. Empty nesters don’t need life insurance  

Becoming an empty nester can be exciting or unsettling. Either way, it’s a great phase of life to consider getting life insurance if you don’t already have it. According to a survey by, almost 40 percent of parents are still financially supporting their adult children to some degree.

Debunking Common Myths About Life Insurance

The survey also indicated that about 60 percent of parents believed their adult children who left home would move back in at some point. A life insurance policy helps support grown children if a parent dies before they financially support themselves.  

5. Stay-at-home parents don’t need life insurance 

Most people understand the need for breadwinners to have life insurance, yet not everyone appreciates the value stay-at-home parents bring to a family. Consider all the duties a stay-at-home parent does – grocery shopping, cooking, cleaning, caring for children, etc. What would it cost you to pay for those services in their absence?  A life insurance policy could make life far easier for the parent left behind.   

6. Employees with a group life insurance policy don’t need a separate life insurance policy 

Employers commonly offer group life insurance policies as a benefit, and the company may pay for all or part of the premiums. Employees who have access to a group life policy should be concerned about three things – coverage, coverage options and portability.

The coverage a group plan offers may not be sufficient to cover your financial needs. Insurance policies allow you to customize your policy with riders to suit your need, but that may not be an option with a group life policy.  

Group life insurance policies may not be portable which means you lose the coverage when you leave your employment. By purchasing a life insurance policy, you are covered no matter where you work, and you can customize the coverage to your needs. 

7. Life insurance doesn’t provide a benefit for the living 

Term life policies only provide a death benefit. Other policies, such as a whole life or universal life insurance policy, accumulates a cash value. Depending on the rules for the policy, you may be able to withdraw the cash value or borrow against it. This could come in handy if you have a family emergency, need long-term care, or need extra funds to see you through a critical illness.  

8. Insurers will decline policies for older people or those who have pre-existing conditions 

Nearly everyone can find a life insurance policy to suit their needs. It may just be a matter of shopping around and getting some quotes. You may opt for a burial insurance policy to cover burial expenses only. You may also choose a life insurance policy that doesn’t require a medical exam.  

9. People can only buy life insurance for themselves 

The reality is the owner of a life insurance policy and the named insured can be two different people. The only criterion is that the policy owner must have a financial interest in the person they are insuring. For example, a married individual may want to buy life insurance for their spouse, children or aging parents. You can even put a life insurance policy in the name of a charity.  

10. Life policies won’t pay out if you die from COVID 

Life insurance policies generally cover loss of life due to infectious diseases. To be sure a loss due to COVID is covered, read the policy wording carefully for any exclusions. 

Life Insurance Is an Important Financial Decision 

Purchasing life insurance is an important part of financial planning. The right life insurance policy for the right stage of life provides financial security for your loved ones and provides peace of mind for the buyer. With affordable premiums available, there’s no reason not to.  

Free eBook: Why Low-Cost Insurance May Not Be The Best

Before you let yourself feel tempted by low premiums, ask yourself what the policy is leaving out, and how it could potentially cost you in the long run.

Free eBook | Think Beyond the Price: What good is a low priced policy if it covers what you don't need and doesn't cover what you do? Learn how to find real value - and protection - by reading Why Low Priced Insurance May Not Be the Best. Download.

Leap | Carpenter | Kemps Insurance Agency Can Help

To learn more about how a life insurance policy can protect those you love if you are no longer here to support them, contact a licensed life insurance agent at Leap Carpenter Kemp Insurance Agency for quotes today. Call us at (209) 384-0727 today!  

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About The Author

Melissa specializes in auto insurance, flood insurance, homeowners insurance, special event insurance, renters insurance, and watercraft insurance. She prides herself on knowing our markets inside and out.

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