10 Life Insurance Myths That Could Be Costing You
Life insurance can be a powerful tool in your financial planning arsenal, but you may be missing out due to a lack of real understanding of what it is and who it's for. A number of common misconceptions about life insurance, especially around cost and eligibility, may make it seem out of reach for you when it really isn't.
Read Next:
Check Out:
Here are 10 important facts about life insurance that you should be aware of to decide if it's a smart fit for your financial future.
A common myth about life insurance is that it's too expensive for most people.
'Many people, especially younger individuals, overestimate the cost of life insurance and needlessly leave their families unprotected,' said Jack Elder, director of advanced markets at CBS Brokerage, an independent insurance brokerage firm. 'The truth is, a healthy 30-year-old can often secure a $250,000 20-year term life policy for around $13 a month.'
Some employers offer life insurance as part of their benefits package, but this typically does not provide the amount of protection your beneficiaries would realistically need. Believing your employer-provided insurance is enough is a common mistake.
'These group policies typically offer a benefit equal to one or two times your annual salary, which is rarely enough to cover long-term obligations like a mortgage, outstanding debts, and future child care or college expenses,' Elder said.
Explore More:
A common misconception is that Medicare covers long-term care — but it doesn't.
'Approximately 70% of individuals over age 65 will require some form of long-term care services in their lifetime,' Elder said. 'Critical services like full-time skilled nursing care, memory care facilities or modifications to your home for accessibility are not covered by Medicare. A life insurance policy with a long-term care rider can be invaluable for situations like these.'
Another common myth is that life insurance isn't necessary if you have savings — but that's not the full picture.
'While savings help, unexpected expenses like medical bills can deplete them,' Elder said. 'Life insurance ensures your family isn't financially burdened.'
Life insurance isn't only about death benefits.
'One of the biggest misunderstandings about life insurance is that its only purpose is a death benefit,' Elder said. 'Modern permanent life insurance policies can be powerful tools for the living, allowing you to build cash value that grows tax-deferred.'
Another myth is that applying for life insurance is complicated and time-consuming.
'Today's technology has streamlined the application process to reduce redundancies and remove obstacles,' said Michelle Buswell, senior vice president and chief operating officer at Legal & General America. 'Questions are built to be reflexive; the multi-hour process of years ago has been shortened to just 15 to 20 minutes for most individuals.'
Many assume that if you have a preexisting medical condition, like diabetes or a heart condition, you'll be denied life insurance.
'Modern medicine and treatments have helped underwriting rules adjust with the times to provide easier access to policies for those who have certain medical conditions,' Buswell said. 'If an applicant is actively managing their conditions and/or has no comorbidities, companies take that into consideration when calculating the health classifications and premiums.'
Another common myth is that life insurance is only for older people. However, it's a tool that can be useful for people of all ages.
'Age milestones don't spur [the need for] life insurance — life milestones do, i.e. getting married, having a baby or buying a home,' Buswell said. 'Purchasing a policy at a younger age or after a life event can help avoid increased premiums.
'The earlier an individual purchases a policy, the less expensive the premium will be over time,' she continued. 'More importantly, they are likely to have fewer health concerns in their 20s, which will always lower the cost of premiums. Purchasing early will serve you best.'
Some people see term life insurance as a waste of money because it doesn't last forever.
'Many people dismiss term life insurance as a waste, considering it a product that offers coverage for a limited time and does not pay out if the policyholder survives the term,' said Chris Jean-Charles, a financial planner at Northwestern Mutual. 'However, this perspective misses what term life insurance provides — affordable protection tailored to short-term needs.'
Jean-Charles emphasized that the working years are actually when the need for insurance is highest, since this is when you most need to protect your income. 'A term policy can ensure their family has the required financial backing in the event of an untimely death,' he said. 'The lower cost of premiums with term life insurance often makes it a feasible choice for individuals on tight budgets.'
There are a number of myths surrounding who should and should not have a life insurance policy, one of them being that only the breadwinner needs life insurance.
'This is one of the most overlooked financial planning mistakes,' said Melissa Murphy Pavone, CFP, CDFA, founder and financial planner at Mindful Financial Partners. 'Just because one spouse doesn't bring in a paycheck doesn't mean their contribution doesn't have monetary value. In fact, replacing the non-working spouse's role often requires hiring multiple people: child care, transportation, housekeeping, meal prep and sometimes elder care too.
'If that spouse were to pass away, the surviving partner may face both emotional devastation and the immediate financial strain of replacing those services, often while still working full-time,' she continued. 'Life insurance for the non-earning spouse can help cover those unexpected costs and allow the surviving parent to take time off to care for children, grieve or simply adjust.'
Another common belief is that life insurance is not necessary for people without children. However, if you take care of parents, siblings or a spouse, you could benefit from having a life insurance policy.
'While these loved ones may not be considered 'dependents' in the traditional sense, they often rely on that individual's income now or will in the future,' said Uziel Gomez, CFP, financial planner at Primeros Financial. 'If something were to happen, the financial impact would be very real.'
More From GOBankingRates
4 Things You Should Do When Your Salary Hits $100K
If a Financial Advisor Doesn't Ask These 5 Questions in Your Consult, Keep Shopping
5 Steps to Take if You Want To Create Generational Wealth
Robert Kiyosaki: 5 Money Habits of People Who Retire Early
This article originally appeared on GOBankingRates.com: 10 Life Insurance Myths That Could Be Costing You
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
WebMD
40 minutes ago
- WebMD
Living with Bipolar Disorder as a High-Achieving Woman
When Bipolar Disorder Meets Ambition Living with bipolar disorder isn't just about mood swings: It's about carrying an invisible weight that few people understand. For high-achieving women like me, that weight becomes even heavier. We're expected to hold everything together – family, career, responsibilities – while quietly battling chaos inside our own minds. The burnout that comes with bipolar disorder doesn't announce itself. It creeps in. One day you're pushing through your to-do list, the next you can't move from bed. It's not just exhaustion, it's emotional overload. The Mental Load No One Sees Living with bipolar disorder often feels like swimming in circles in the dark. You crave peace, but when a sliver of light finally appears, you don't trust it. You brace for the next crash. The fear of the unknown becomes just as heavy as the depression itself. When the depressive episodes hit, so do the thoughts: Why am I not like her? What's wrong with me? Did I cause this? I remember wondering if I was being punished for running away from home, for becoming a teen mom, for talking back, for leaving in the middle of the night. Burnout at Every Stage of Life The emotional burnout was always present, but it peaked during life transitions: When I became a teen mom When I went back to school After every child I had When I lost my husband When I tried dating again Each season added more weight. I was living life on edge, constantly trying to avoid pain. But when it finally hit, it hit hard. And it kept me stuck. Postpartum Depression and Family Silence I didn't recognize postpartum depression at first. I just knew I couldn't enjoy my babies the way I wanted to. I felt detached, overwhelmed, and guilty. Years later, I realized my mom had likely experienced the same thing. It opened my eyes to how generational silence keeps us sick. No one in my family knew I was struggling. They saw me tired, maybe reactive, but not in pain. I kept it inside. That silence cost me my peace. What I Missed While I Was Surviving Looking back, I see how much I missed: Real joy in motherhood Emotional connection in relationships Moments of financial peace True rest and presence Smiles that weren't just a mask The True Cost of Emotional Burnout Bipolar disorder is unpredictable. The highs and lows create stress and anxiety about the future. You lose your most valuable resources: time, energy, clarity, even money. And when you're stuck in that cycle, you miss the life happening right in front of you. I didn't know how to feel peace. I didn't know how to be present. I didn't know how to listen to my own voice, my intuition, my feelings. But I do now, and I support other women by helping them master their emotions, overcome burnout, and finally feel the peace and progress they've been chasing.
Forbes
an hour ago
- Forbes
First Pill For Obstructive Sleep Apnea Shows Promise In Phase 3 Study
The American Academy of Sleep Medicine has indicated that an estimated 26 percent of adults between ... More the ages of 30 and 70 years have sleep apnea. (Photo: Getty) You could say that it's difficult to mask the challenges that people with obstructive sleep apnea face every day. But if this pill from Apnimed, Inc. eventually gets approved by the U.S. Food and Drug Administration, it could give those OSA sufferers who are having trouble wearing a continuous positive airway pressure mask while sleeping another option. Apnimed recently announced rather eye-opening topline results from the SynAIRgy phase 3 clinical trial of their AD109 pill. A little over half (51.2%) of the study participants who took the once-a-day pill had a reduction in their OSA severity while nearly a quarter (22.3%) experienced achieved complete OSA control. Obstructive Sleep Apnea Affects A Quarter Of The Adult Population More options would probably be a welcome possibility for the over 25 million adults in the U.S. who suffer from OSA, based on the National Healthy Sleep Awareness Project. The American Academy of Sleep Medicine has indicated that an estimated 26 percent of adults between the ages of 30 and 70 years have sleep apnea. That may be an underestimate because people are kind of asleep when they are experiencing signs and symptoms of OSA. It could take someone else trying to share a bed with you to tell you that you are snoring or even gasping for breath when you are asleep. OSA is one type of sleep apnea. Sleep apnea is when you repeatedly stop and start breathing while sleeping. Its important to know if this is happening because breathing is sort of important. Sleep apnea can lead to sleep deprivation, which, in turn, can lead to daytime drowsiness and over the longer term various chronic medical conditions, as I've described previously in Forbes. One such condition is high blood pressure, which in turn can raise the risk of heart disease and stroke. OSA is when the apnea is due to your throat muscles relaxing too much and blocking your airway. That's why one possible sign of OSA is snoring, which can occur when air tries to pass through the narrowed airway. The following illustration shows what can happen to the airway with OSA: (Illustration: Getty) Here Are The Current Treatment Options For Obstructive Sleep Apnea All of the currently available treatment options for OSA are focused on one thing: keep that airway open as much as possible. Changes in sleep position could help. For example, sleeping on your side, particularly the left side, can keep the airway open better than sleeping on your back. the latter can allow your tongue and soft palate to collapse into your airway. One oft-mentioned treatment option is the CPAP mask. The name is a clue to what it does. You wear a mask that will continuously will blow air into your nose or nose and mouth. That air is supposed to provide positive pressure to keep your airways open, sort of like blowing air into one of those balloons that can become a balloon animal. Although a variety of such masks are available, wearing such a mask throughout the night may not necessarily be the most pleasant, comfortable or sexy thing. Another option is some kind of mouthpiece designed to keep the throat open during sleep. Some such devices thrust your lower jaw forward. Other such devices hold your tongue is particular positions. When OSA gets particularly severe, surgery may be needed. This could be surgery to remove excess tissue in the neck that may be blocking the airway or move forward the jaw bones to give more space behind the tongue and soft palate. Life-threatening cases of OSA may even require a tracheostomy, which is when a hole is made in your throat and a breathing tube is inserted there. Now you may have heard about one of the glucagon-like peptide-1 receptor agonists, Zepbound, getting FDA-approval for severe OSA. This would be mainly for folks who have OSA due mainly to obesity. Excess fatty tissue in the neck can indeed predispose you to OSA. Therefore, weight loss can be helpful in reducing OSA. However, many people suffer from OSA do not have excess body weight. For many, it's just the anatomy of the airway and the way the nerves happen to be working or not working that allows too much collapse of the airway. The Apnimed Pill Could Become The First Prescription Pull For Obstructive Sleep Apnea This brings us to how AD109 is supposed to work. The medication is a combo of 2.5 mg of aroxybutynin, a new type of antimuscarinic, and 75 mg atomoxetine, which inhibits the reuptake of the neurotransmitter norepinephrine, thereby increasing the time it spends in between nerves. These work to increase the nerve signals sent through the hypoglossal motor nucleus that control the muscles in the upper airway. The medication has already gone through more than 15 Phase 1 and 2 clinical trials. A Phase 2b clinical trial named MARIPOSA showed that those taking AD109 experienced statistically significant reductions in their AHIs. AHI stands for apnea-hypopnea index, a commonly used measure of how severe sleep apnea is. The AHI is the average number of apneas, which are complete pauses in breathing, and hypopneas, which are partial reductions in breathing, that happen per hour of sleep during a sleep study. Normally, this should be less than five. Having five to 14 such events per hour classifies you as having mild sleep apnea. When this goes up to 15 to 29, it's moderate sleep apnea. The severe range is 30 or more such events per hour. Next up was the SynAIRgy trial, a randomized, double blind, placebo-controlled, parallel-arm of the medication designed to extend for six months. It included 646 adult study participants with OSA who either couldn't tolerate or didn't want to use CPAP. Around half (49.1%) of the study participants were women. At the beginning of the trial, 34.4% had mild OSA, 42.2% moderate and 23.2% severe. Patrick Strollo, Jr., MD, Vice Chair of Medicine for Veteran's Affairs and a Professor of Medicine at the University of Pittsburgh School of Medicine. served as the study chair of SynAIRgy. Strollo described the results so far as 'highly encouraging." At the 26-week mark in the SynAIRgy trial, those taking AD109 every day had on average a 55.6% reduction in their AHI. As mentioned previously, 51.2% actually dropped in sleep apnea disease severity categories with 22.3% going to the no apnea category, namely less than five events per hour. Those taking AD109 also on average had improvements in the amount of oxygen they were getting into their blood via their lungs. There were also no AD109-related serious adverse events with the medication in general being well-tolerated. Topline results from a second Phase 3 clinical trial, LunAIRo, will probably be available by the third quarter of 2025. All of this means that the company is currently on track to submit a New Drug Application for AD109 to the FDA by early 2026. If it reaches the market, AD109 would be the first prescription pill specifically for obstructive sleep apnea—which, again, affects quite a lot of people out there, probably much more than people realize. So don't sleep on what happens next.
Yahoo
an hour ago
- Yahoo
Post-storm resource center open through July 2 in downtown Bemidji
Jun. 29—BEMIDJI — A post-storm resource center will be open from 11 a.m. to 6 p.m. through Wednesday, July 2, at the former First National Bank building, 429 Minnesota Ave. NW. The resource center, previously located at the Sanford Center, has been relocated to better assist residents impacted by the June 21 storm. The center offers the following resources: * Hot meals prepared by the Salvation Army. Lunch is served from 11:30 a.m. to 1:30 p.m., and dinner is served from 4 to 6 p.m. * Cases of bottled water * Individual snack items * Pre-packaged hot meals * Cleaning supplies For those who lost food due to the storm or power outages, a Supplemental Nutrition Assistance Program (SNAP) and Minnesota Family Investment Program (MFIP) food benefit replacement program is available. To learn more, visit the second floor of Beltrami County Health and Human Services at 616 America Ave. NW or call (218) 333-8300. The deadline to apply is Tuesday, July 1. The resource center is supported by Beltrami County Public Health, the United Way of the Bemidji Area, American Red Cross, the Salvation Army, Community Resource Connections, the Bemidji Fire Department, as well as local and community donors.
