We all insure our cars and homes. Some of us even insure our pets. But when it comes to life insurance, not so much.  Why not?

Since September is Life Insurance Awareness Month, we thought it was the perfect time to shed light on this often-misunderstood financial tool that can provide a safety net for your loved ones. In this article, we’ll debunk some of the major myths that may be keeping you from taking advantage of life insurance.

Little known fact: Did you know life insurance dates to 1759 when it was conceived as a way for church ministers to provide financial security to widows and orphans?  

According the latest Insurance Barometer LIMRA study, more than 100 million uninsured and underinsured Americans say they need (or need more) life insurance coverage. Interestingly, 36% of consumers say they plan to purchase life insurance within the next 12 months, which represents the highest purchase intent in the survey’s history. LIMRA credits this increase in interest to the realization that nearly 4 in 10 families would face financial hardship within six months if the primary wage earner died. For 1 in 5 families, it would be within just one month.

Myth 1: Life Insurance is Too Costly. According to the 2023 Insurance Barometer Study, more than half of Americans overestimate the cost of insurance by as much as three-fold. This was especially true for younger generations. Forty-four percent of Millennials estimate that the annual cost of 20-year term life insurance for a healthy 30-year-old at over $1,000 when it’s closer to $165 per year. This misconception can needlessly put families at risk. Contact Insureous for a quote.

Myth 2: Life Insurance is Only for the Elderly. Many people believe that life insurance is only necessary as you get older. However, purchasing life insurance when you’re young and healthy can be more affordable and provide long-term financial security for your loved ones. It’s never too early to consider life insurance and the younger, the better.

Myth 3: Life Insurance is Only for Breadwinners. Life insurance isn’t just for the primary breadwinner of the family. It can also be essential for stay-at-home parents or caregivers. Their contributions, such as childcare and household management, have a significant financial value. Life insurance can ensure these services are covered in case of their untimely passing.

Myth 4: Employer-Provided Life Insurance is Sufficient. Many individuals assume that the life insurance coverage offered by their employer is enough. While employer-provided policies are a valuable benefit, they may not be adequate to cover all your family’s financial needs such as debts and mortgage, especially if you change jobs or lose your job.

Myth 5: Life Insurance is Only About Death Benefits. Newer term life insurance policies offer living benefits that can help you pay for hospitalization or long-term care. And whole life or universal life policies can accumulate cash value over time, which you can borrow against or use for various financial needs, including retirement planning.

Little known fact #2: Interest in life insurance is at an all-time high. According to new research by the LIMRA, a trade group, there are 102 million uninsured and underinsured Americans who believe they need to buy life insurance or to increase their coverage. This represents 40% of the adult population.

Myth 6: Buying Whole Life Insurance is Never a Good Idea

Don’t be smoozed by so-called financial gurus preaching that whole life insurance is always a poor choice compared to term life insurance. While it’s true that term life is less expensive and can often meet the needs of individuals and families, whole life offers unique benefits that should be carefully weighed. Term insurance ends when the term you buy (10, 20 or 30 years) ends. Most likely when your term ends you’ll be too old to afford any other plan so your family will be out of luck when you pass.

Whole life, on the other hand, comes with a cash value component that grows over time, offering a source of savings within the policy. This cash value can be borrowed against or withdrawn for various financial needs, such as paying for education, purchasing a home, or supplementing retirement income. Whole life is also a valuable tool for estate and legacy planning and unique tax advantages.

Myth 7: Single People Don’t Need Life Insurance. While single individuals without dependents may not have the same immediate need for life insurance, having a policy can still be beneficial. It can help cover funeral expenses and any outstanding debts, ensuring that these financial burdens don’t fall on your family or loved ones.

Myth 8: You Can’t Get Life Insurance if You Have Health Issues. Many individuals with pre-existing health conditions assume they can’t qualify for life insurance or that it will be unaffordable. While it may be more challenging to obtain coverage or may come at a higher premium, there are insurance options available, such as guaranteed issue or simplified issue policies, designed to accommodate individuals with health concerns. Contact Insureous to see if you qualify.

Myth 9: Life Insurance is a One-Size-Fits-All Solution. Life insurance needs vary from person to person. Some people may require a larger policy to cover substantial financial obligations, while others may only need a smaller policy for specific purposes. It’s a myth that there’s a one-size-fits-all solution. The right policy depends on your unique circumstances and financial goals. Insureous can help you determine your life insurance needs.

Myth 10: You Can’t Change Your Life Insurance Policy. Some individuals believe that once you purchase a life insurance policy, you’re locked into it for life. In reality, many policies offer great flexibility. You can often adjust your coverage, change beneficiaries, or even convert term life insurance into permanent insurance if your circumstances change.

Conclusion

Life insurance is a powerful tool designed to safeguard your family’s financial future. It’s not as costly as you might think, and the need for it post-COVID has never been more apparent. No matter the month or your stage of life, take the time to evaluate your coverage and ensure that your loved ones are protected in case the unexpected happens. Your family’s peace of mind is worth the investment.

Schedule a Complimentary, No-Obligation Appointment with Insureous Health Solutions.