When it comes to protecting your family, finding the right strategies to prepare for the unexpected is an important step. Life insurance is a big part of creating a strong financial future, but deciding on a policy type and coverage amount can make purchasing life insurance feel overwhelming. Add to that a bevy of misinformation, and it’s no wonder nearly half of all Americans don’t have life insurance coverage. 

Life Insurance Myths vs. Facts

The many insurance myths out there can add confusion to the process and ultimately prevent people from getting the coverage needed to protect their families’ financial futures. It’s important to recognize the myths and know the truth before making a decision to purchase or not purchase coverage. We put eight common life insurance myths to rest and set the record straight.

Myth #1: Life Insurance Is Too Expensive

According to the 2022 Insurance Barometer Study by LIMRA and Life Happens, more than half of Americans overestimate the price of life insurance by as much as three times the actual cost, and 44% of millennials overestimate life insurance costs by six times.

The Facts: Life insurance is typically less expensive when purchased when you’re young and healthy. The cost of term life insurance for a healthy 30-year-old is around $170 per year. Yet, 43% of Millennials estimate it to be a costly $1,000.  

Term life insurance is generally an inexpensive option. You may be able to lock in the coverage you need for as little as a dollar a day.

Myth #2: Only Families With Young Children Need It

Younger consumers who do not yet have any dependents may believe they can put off buying life insurance, while empty-nesters and retirees often assume that coverage is no longer necessary.

The Facts: In reality, life insurance is significantly less expensive for the young and healthy, and 4 in 10 insured consumers wish they had purchased their policy at a younger age. Purchasing coverage while you’re young can help you gain guaranteed insurability for when you’re older.

Life insurance can be the foundation of financial security for your family or business — at any stage of life. Did you know there are options for how a policy pays out the death benefit? Our Income Guard Term Life coverage provides set monthly benefit payments to help your loved ones stay on their feet and continue to cover regular expenses.

Myth #3: Children Don’t Need Life Insurance

Most people associate life insurance policies with providing a safety net for loved ones who depend on them financially, so it’s easy to assume that children wouldn’t need a policy in place.

The Facts: With bright futures ahead, you want to be sure your children are prepared to create a strong foundation for the future. Buying life insurance for children now, while they’re young and healthy, has several benefits.  

First, it can help guarantee their insurability to ensure they will have coverage as an adult, even if they become uninsurable. Second, it can help save on premiums. Third, certain policies like a permanent life policy, builds a cash value that can be used later to help pay for college tuition, a down payment on a house and more.   

Myth #4: The Life Insurance I Purchase at Work Is Enough

One quarter of American workers believe the coverage they get through work is enough, and that the policy will stay intact even if they change jobs.

The Facts: The median life insurance coverage offered at the workplace is either a flat sum of $20,000 or one year’s salary, and according to the study, 44% of families would face financial hardship within six months, and 25% would suffer financially within a month of a wage earner’s passing. Having an individual policy in addition to your work-provided coverage also guarantees you’ll continue to have life insurance coverage even if you change jobs. Employer-provided policies may not be portable.

Myth #5: Term Insurance Can’t Be Converted to Permanent Coverage

For many families, term life insurance is the more affordable option to ensure you’re covered during your family’s most crucial financial years — but what happens if you decide you want coverage that lasts a lifetime?

The Facts: Many term policies are renewable and convertible to a permanent policy. After holding your term policy for a set period of time, it may be possible to convert it with a special premium credit. The credit helps offset any increase in premium costs and may waive the usual health assessment.

Myth #6: Stay-at-Home Parents Don’t Need Insurance

It’s easy to think that life insurance coverage is only needed if your family depends on your income, but that idea puts many families’ financial stability at risk.

The Facts: If you’re a stay-at-home parent or you care for an aging family member, it would take a considerable amount of money each month to replace the support you provide. A life insurance policy like Income Guard Term Life can help ensure your loved ones would have monthly income to pay for the care you provide.

Myth #7: Life Insurance Is Only Used for the Death Benefit

It’s common to think of a life insurance policy as only paying out a death benefit, and many individuals who purchase life insurance do so solely to safeguard their beneficiaries against financial hardship.

The Facts: Some policies offer ways you can use your coverage while you’re still living. The cash value from a permanent life insurance policy can provide supplemental income for retirement, while adding a Daily Living Rider to your term or permanent policy, allows you to access part of your policy’s death benefit should you become chronically ill.

Myth #8: It’s Too Difficult to Buy Life Insurance

More than half of all Americans say they have put off buying life insurance because they don’t know what to buy or how much coverage they need.  

The Facts: Working with an agent can help demystify the process, and depending on the coverage amount you want and certain policy eligibility requirements, you may be able to get life insurance quotes and protection without even leaving your home.

Are You Protected?

Don’t let these myths keep you from not having the coverage you need to protect yourself and your loved ones. Working with a Farm Bureau agent to find a policy that fits your needs and goals makes the process easy. Contact your local Farm Bureau agent today to help create a solid financial foundation.  

Individual eligibility for all product promotions is subject to underwriting and approval. Estimated premium payment is for 20-year Choice Term Guaranteed Premium Plan; Standard; 35-year-old male or female; non-smoker. Amount is for demonstrative purposes only. Contact your Farm Bureau agent for a quote on your actual monthly premium payment

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.