There’s nothing exciting about life insurance…or is there?
Life insurance is meant to take care of you and your loved ones. Life insurance is designed to protect your income in the unfortunate event of your passing, whether too early or at a ripe old age. But who wants to think about that?
We all love the idea of YOLO, You Only Live Once, but no one likes to think about the “only once” part referring to the end.
That mindset can produce the kind of consumer who shies away from life insurance altogether, or worse, one who never thinks about it and develops inaccurate opinions about a genuinely important financial tool. Here are four myths why people don’t have life insurance and why their assumptions may not be as accurate as they think.
1. “The Cost Is Too High”
The number one reason people skip life insurance is that they think they can’t afford it. But the numbers tell a different story.
Approximately 72% of Americans overestimate the cost of a basic term life insurance policy and that gap between perception and reality is significant. According to LIMRA data, a 20-year, $250,000 term life insurance policy for a healthy 30-year-old can cost under $200 per year. For broader coverage, a $500,000 20-year term life policy can cost as little as $23 per month for a healthy 30-year-old woman and $30 per month for a man with a similar profile. That’s roughly $1 or less per day.
The reality is that for most healthy adults, life insurance is far more affordable than assumed. The first step is simply getting an actual quote.
2. “There Are Other Financial Priorities”
Student loans. Credit card debt. Mortgage payments. Retirement savings. These are all real, pressing concerns and it’s natural for them to take center stage. Life insurance, by contrast, is about the unexpected, and it’s human nature to focus on what’s immediately in front of us.
But here’s what often gets overlooked: life insurance isn’t just about you. It’s about what comes after you. Without it, the debt you leave behind becomes someone else’s problem like your spouse, your children, your family.
Among the primary explanations Americans give for not owning life insurance are that they think it’s too expensive and that they have other financial priorities, including paying living expenses, building savings, managing debt, and saving for retirement. While those priorities are understandable, life insurance exists precisely to protect the people you care about from financial hardship when they’re most vulnerable. It belongs in the conversation alongside those other priorities, not after them.
3. “I’m Not Sure I Actually Need It”
Some people assume they’re either too young or too old to benefit from life insurance. Neither is true…partly.
You’re never too young. Much like retirement planning, the earlier you start, the more financially protected you and your loved ones will be. Younger applicants typically qualify for lower premiums and locking in a rate while you’re healthy means a future health diagnosis won’t affect what you already have in place.
You’re also never too old. Policies exist across all age ranges and can still help cover outstanding debt, final expenses like burial costs, and estate closing costs. This will relieve your loved ones of those burdens at an already difficult time. It’s important to note, most carriers stop offering policies at age 90, and the affordability of a policy could be high when a person is in their 80.
A record-high 42% of American adults, representing approximately 102 million people, say they need life insurance or need more of it than they currently have. The need is there. The question is whether people act on it.
4. “I Don’t Think I’ll Qualify”
Many people assume that a pre-existing health condition automatically disqualifies them from getting life insurance. That’s not the case.
While certain conditions can result in higher premiums, coverage options still exist for people managing a range of health issues, including diabetes, heart conditions, and others. About one in ten Americans believe they wouldn’t qualify for life insurance, but that belief often goes untested. Guaranteed issue and simplified issue policies exist specifically for those who may not qualify for traditional underwriting.
If you’re concerned that a health condition might close the door on coverage, the best thing you can do is open a conversation with a qualified financial professional. You may have more options than you think.
The Bottom Line
Life insurance rarely makes the list of exciting financial topics. But the protection it provides for your income, your loved ones, and your legacy makes it one of the most important pieces of a complete financial plan. Just 29% of consumers believe they are knowledgeable about life insurance, and that knowledge gap is a big part of why so many families remain unprotected.
Don’t let assumptions make that decision for you. Talk with a financial professional at Barnum Financial Group about what coverage might actually cost and what it could mean for the people who depend on you.
