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Debunking Common Misconceptions: The Truth About Life Insurance

Often, misconceptions stop individuals from signing up for life insurance. For example, approximately 72 percent of participants in one study overestimated the cost of a basic term life insurance policy. It’s preconceived ideas like this that keep people from getting the coverage they need.

Let’s get down to the facts so you are equipped to make an informed decision about your life insurance policy.

Misconception #1: Life Insurance is Too Expensive

Let’s start with our example. Many people believe life insurance is a luxury only the wealthy can afford. This stops them from pursuing coverage, or they choose the cheapest coverage available with the assumption they can’t afford a better option.

  • The Reality: Life insurance can be tailored to fit various budgets, with term policies often being quite affordable. You don’t have to sacrifice your long term goals for affordable premiums.
  • Digging Deeper: A $500,000 term life insurance policy for a healthy individual in their 30s can start at around $20 a month for a 20 year term.

Misconception #2: Life Insurance is Only Necessary for Older Adults

Another common belief is that life insurance is only important for individuals nearing retirement. There are multiple reasons why younger adults should prioritize purchasing a life insurance plan instead of putting it off until retirement age.

  • The Reality: There are numerous benefits when you purchase life insurance at a younger age. Lower premiums, locking in lower rates, financial protection, and longer policy durations are just a few reasons to purchase a plan early.
  • Digging Deeper: A $500,000 plan purchased at the age of 25 for a healthy male could come out to $20 a month or $4,800 over the course of its 20 year term. If the man develops a health condition during that time, he is still locked into his rate which may have otherwise severely increased his monthly cost or made him uninsurable altogether. Just waiting until the age of 35 alone could increase the monthly premium to $40 a month, showing that purchasing the plan earlier saves him $4,800 over the term of the plan.

Misconception #3: Employer-Provided Life Insurance is Sufficient

Many people rely solely on employer-provided life insurance and assume that it’s enough. While having a policy through your employer is often a good start, it can provide a false sense of security that could put you at risk.

  • The Reality: Plans provided by an employer are often chosen to cover a baseline. What a plan like this can miss is the specific needs of the individual that may vary significantly from employee to employee. Additionally, relying solely on this plan puts the individual at risk of losing coverage if they experience a job change.
  • Digging Deeper: The coverage provided by many employers equals 1x or 2x the individual’s salary. This often isn’t enough to meet most families’ long-term financial needs. Then, if faced with a job change, the limited portability of the plan puts the employee at risk of being uninsured. It may also become more difficult to gain coverage because they waited too long to purchase a plan independently.

Let’s Discuss a Life Insurance Plan

Don’t let misconceptions keep you from the security you deserve. Start as early as you can, lock in an affordable rate, and make sure your plan fits your needs and isn’t dependent on other factors such as employment. Talking with a trusted insurance agent will ensure you have the facts about life insurance policies and protect you against misconceptions that would keep you from the coverage you need.

At Ianniello Insurance Agency we are here to answer any questions you may have about Life Insurance. We’re ready to help you find a policy that fits your needs and will help protect your family for years to come. Contact us today to start the process or request a quote here.

Additional Life Insurance Resources

If you’d like to learn more about Life Insurance, you may find these articles useful:

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