Life insurance can be confusing, but after reading these 6 life insurance myths debunked, you should be able to navigate the industry with confidence.
Life insurance, much like quantum physics and ancient literature, isn't a topic well understood by many. In fact, in a LIMRA study that tested Americans' knowledge of life insurance, 70% of people failed. While it's true that quantum physics may not affect your everyday, life insurance can have an important and immediate effect on our financial well-being and that of the people who matter most to us.
If you've found yourself at a point in life where you have people and assets to protect, but haven't decided to buy life insurance for of any number of reasons, read through these 6 life insurance myths to make sure you have the story straight.
MYTH #1: If you smoke, you can't get a life insurance policy.
This is largely not true. While smoking can be a factor in determining your rate class, or what rate you'll pay for your policy, it is rarely the standalone cause that someone would be denied life insurance. That being said, a non-smoker of the same age will commonly be given a better rate, so if you know you need a life insurance policy, quitting for at least one year could help decrease your premiums.
MYTH #2: My spouse is the breadwinner, so I don't need life insurance.
Many people believe that the partner who earns more is the only spouse who needs to buy life insurance. Life insurance isn't only about income replacement though. According to one LIMRA study, 29% of people would be in financial trouble within a month1 if they didn't have assistance from their spouse. Stay-at-home parents, even if they don't generate income, bring an immense value to the household through childcare, cooking, housework, bill paying and more. Regardless of if the surviving spouse was the breadwinner, they could still end up financially stressed if they suddenly had to pay for full-time childcare or to hire a housekeeper to assist them.
MYTH #3: I'm young. I don't need life insurance yet.
Many people believe that life insurance isn't applicable to them until they are older, but this couldn't be further from the truth. Regardless of your age, if you have assets or loved ones to protect, life insurance should be a significant consideration. What's more, policy rates may increase as your age does. Since you are never going to be as young as you are today, it is arguably the best time to apply for life insurance.
MYTH #4: I have life insurance through my employer, so I don't need an individual policy.
According to one LifeHappens.org study, 65% of young people solely have life insurance through their employer.2 While this type of group life insurance policy can be a great benefit and a tremendous help to your loved ones if something were to happen to you, group life insurance has several limitations. Group policies may not provide a large enough death benefit to help support your family. Group or employer life insurance policies may also only be in effect as long as you're employed with said company. If you lose your employment or quit, you likely will no longer be covered.
That being said, an individual policy will remain in effect as long as you pay your premiums. Another benefit of individual policies is that they can also be tailored to your needs, helping to ensure that you have the coverage amount you intend for your family.
MYTH #5: I'm too overweight to qualify for life insurance.
Your physical health and mental health are indeed considered in determining your rate class, and this includes how much you weigh. Obesity or your body mass index (BMI), can cause a number of health conditions and overall poor health, but many people can still qualify for a policy. It all starts with a conversation with our agents, who can advise you on the best coverage for your individual situation. Many times, they'll recommend going through with your application, opting to review your policy later if you lose weight. That way, you're covered even while you pursue better health.
MYTH #6: I can't afford life insurance.
A startling 80% of all people overestimate the true cost of life insurance, according to a LIMRA study, with millennials overestimating by 213%.3 It's not uncommon to hear that life insurance is simply too expensive, but the truth is that policies come in all shapes, sizes and prices. There is likely one that is affordable for you. Life insurance can vary by age as well, for example, a 40 year old man, in the preferred plus rate class, can get a 20 year policy for less than a man in his 30's or 40's.
Life insurance is an important consideration for many adults, whether they realize it or not. If you were to pass away unexpectedly, a policy can help your loved ones' lives continue without feeling the financial impact of your absence. If you have fallen for any of the life insurance myths we listed above, don't worry, you aren't alone. But with all of this newfound knowledge, maybe you're finally ready to take the plunge in helping to protect your loved ones.
Get started by trying our free life insurance calculator tool or requesting a free quote today.