Myth #1      Life Insurance Is Not Available for Individuals Who Are Sick or Have Poor Health

If you suffer from illnesses—including diabetes or high blood pressure—you can still purchase a policy. Remember, there has to be a way to cover the expenses for anyone who passes away. There are life insurance companies who will extend new policies to individuals with poor health. However, they tend to be costlier. It is highly recommended that you thoroughly research different life insurance companies before making a decision. 

Myth #2      Since I'm Single without Dependents, I Do Not Need Life Insurance

Funeral costs, medical bills, and personal debts must be paid. If you are uninsured, you may leave unwanted expenses for your family to handle. Life insurance helps cover these costly debts. It is recommended that you get coverage if you are the sole financial support for an older relative. 

Myth #3      Nobody Needs That Much Life Insurance Coverage

There are two main points to keep in mind when choosing how much coverage you should have. These factors include:

• Knowing immediate needs, including funeral expenses and estate taxes
• Making sure your family is not stuck with onerous monthly bills, unpaid college loans, or medical expenses

There is no main constant when contemplating the amount of coverage you need. However, many individuals purchase life insurance that is five to seven times their annual available income. 

Myth #4      Life Insurance Agents Are Experts I can Trust to Determine the Coverage I Need

Most agents have their customers’ interests in mind when advising options. Yet there are some agents who specialize in specific types of life insurance. Many insurance agents are compensated differently for selling different kinds of coverage. Shop around for the appropriate agent.

Myth #5      Buying Term Life Insurance Is Always a Better Deal than Purchasing Whole Life Insurance

It is a general fact that term life insurance policies have lower premiums than permanent cash-value whole life policies. However, whole life insurance is the combination of a term policy and is considered a tax-favored investment. There are certain stipulations to consider if you either plan to maintain your policy for 20 years or can more comfortably afford the premiums

By waiting more than 20 years to draw investment of the total return from whole life coverage, higher dividends could be attained. This amount is generally higher than term coverage. Other permanent insurance options to consider include variable universal life and universal life.

Myth #6      Term Life Insurance Policies Can Be Converted to Whole Life, so There Is No Need to Worry about Losing Coverage if I Become Critically Ill.

Over two-thirds of term policies have clauses where policyholders can convert to whole life, regardless of health problems.  However, many of these policies can only be converted within a 5- or 10-year frame. By not converting before the policy lapses, the insurance company may keep your paid premiums and is not required to pay a dime on the policy. Make sure to review your policy yearly to avoid missing opportunities. 

Myth #7       I Am Healthy and Do Not Have the Need for Life Insurance until I Am Much Older

Keep in mind that the older a person is, the higher the cost of purchasing life insurance. Purchasing a life insurance policy when you are healthy helps reduce the high cost, as life insurance coverage is imperative in case of unexpected situations.

Myth #8       The Government Will Take Care of My Burial Expenses

Social Security will only pay a one-time death benefit that amounts to $255 to an eligible spouse or a child of the deceased. However, certain restrictions may be enforced. Since the average funeral cost exceeds $5000, this small amount will probably offer little help. However, there are exceptions. Even so, no one should count on the government to pay for a funeral.

Myth #9       Life Insurance Is Expensive

Having life insurance coverage does not have to be expensive. In fact, many are affordable for all types of situations. Depending on health, type of insurance, and the amount taken out, insurance premiums can fit into most budgets. Term life insurance is an affordable option most people choose for coverage.

For instance, let us say you are a healthy, non-smoking, 38-year-old female with good family health history. You may be able to purchase a 10-year coverage policy, with a $250,000 death benefit, for an average of $14.70 per month, or you purchase a 10-year policy with a $500,000 death benefit instead.  The latter may have payments hovering around an average of under $20 per month. 

Myth #10       You Can Transfer Your Life Insurance Policy from Job-to-Job

In general, whenever an employer provides life insurance for employees, the policy is considered group life insurance. This type of insurance usually is not considered portable. Once a change of job occurs, coverage is left behind. However, if you supply your own life insurance coverage, there should not be any penalties suffered if you leave a job. 

Additional Resources 

- You can locate an agent in your area by using the agent locator at www.lifehappens.org  
- You can learn more information about Social Security benefits at www.ssa.gov 
- You can learn how much coverage you need by reading articles at www.iii.org