Common Life Insurance Myths and Why You Should Ignore Them
Updated: Oct 10
Most common life insurance myths:
Life insurance is complicated and slow to get
You need to go through a medical exam to get life insurance
You cant get insured if you have a pre-existing medical condition
Life insurance is only for married people with kids or people with dependents
Myth #1: Life insurance is expensive Here's the thing - life insurance doesn't cost as much as you might think. It costs less than $100 per month. If you compare prices across different carriers, you'll see that the average rate is around 2% of your annual salary. This means that if you earn $50K annually, you could pay up to $500 each year just to get the peace of mind of a life insurance policy. Now, obviously, not everyone needs such high levels of coverage. For example, someone earning $25K would probably be fine paying $250 per year. However, anyone making over $75K should definitely consider getting additional coverage. After all, if something were to happen to them, their family wouldn't be able to afford to live comfortably.
Myth #2: Life insurance is complicated and slow to get
Unlike things you buy and pay for in monthly installments, life insurance is something that you purchase and hope to never use. And yet, it can offer a lot of peace. Life insurance is not difficult to understand, but there are certain terms and conditions that must be met before an application will be accepted. Life insurance offers a death benefit to your loved ones in case you die. The cost of the death benefit comes in the form of a monthly premium, and the specific amount of the premium depends on many factors (type of life insurance, your age, health, location, and more). As long as you pay the monthly premiums and your policy term is valid, your loved ones will receive a death benefit payout from the insurance company in the event of your death. While many traditional types of life insurance require a medical exam or access to your medical records, there are "no exam life insurance policies" that can give you coverage in just a few minutes.
Myth #3: You need to go through a medical exam to get life insuranceYou can buy life insurance with no medical exam. This is called no-medical or direct application and it's the fastest way to apply for life insurance, but you have to be careful because not all companies offer this option. If your health isn't perfect, you may want to wait until after an annual physical before applying. As part of the application process, many life insurance policies require you to take a medical exam. In order for the insurance company to calculate your life insurance premium and rate, they need to know about your health and medical history. The good news is that there are life insurance policies that will allow you to skip the medical if you don't want to be poked and prodded by a stranger, or if you just don't have time.
Myth #4: You cant get insured if you have a pre-existing medical condition You can, but it might be more expensive because you may be viewed as a higher risk by the insurance companies so it's possible that the number of providers willing to cover you will be limited. Everyone who applies for life insurance is assessed on a case-by-case basis, so it's really up to your particular circumstances. Some pre-existing conditions might not affect how much you pay for life insurance, but more serious conditions like heart disease or cancer can make it difficult to get a competitive price. It is important to let your provider know if you have a pre-existing medical condition so they can weigh up your risk and chances of claiming. This will help them decide how much to charge for insurance, or if they'll offer you a policy at all.
Myth #5: Life insurance is only for married people with kids or people with dependents It is clear how the death benefit will be used when people are married with children. The money will be used to support their household, helping them transition to life without them. It is not the same when you are single. There are a lot of reasons why you might buy life insurance if you are single, and you can use your single life policy death benefit in many different ways such as:
Funeral costs: even if you dont care much about what happens after you die, the odds are high that your loved ones will probably want to have some sort of funeral or remembrance service).
Private student loans: when you die, federal student loans will usually be discharged, but private loans may not.
Credit card debt: it is possible for your family to get stuck with your credit card balances after you pass away.
Future health issues: you might want to buy life insurance now if you know that you have a family history of chronic conditions and may be affected later in life - the younger you are, the cheaper your premiums will be.