Life Insurance 101: Myths vs. Reality
When it comes to life insurance, there’s a lot of confusion. You might hear friends, coworkers, or even well-meaning family members throwing out opinions that can make you wonder, “What’s actually true?” Don’t worry; you’re not alone in feeling a little lost.
Life insurance is one of those things that people often misunderstand because of all the myths floating around. But the truth? Life insurance can be much simpler and more accessible than you think.
Let’s clear up some of those common myths, one by one, and get to the facts so you can feel more confident in your decisions.
Myth 1: You Can’t Get Life Insurance If You Use Marijuana
For years, there’s been a strong belief that if you use marijuana, you’re automatically disqualified from getting life insurance. The reality is far more nuanced.
Reality: Marijuana use does not automatically make you ineligible for life insurance. More insurers are updating their policies to reflect the changing legal landscape, especially as marijuana becomes legalized for recreational or medical use in many states. What insurers really care about when it comes to life insurance and marijuana use is how frequently you use it and why. Occasional recreational use might get a different response than daily use for medical reasons. You could be classified in a different risk category, which could affect your premiums, but it doesn’t necessarily mean you’ll be denied coverage.
Here’s the bottom line: You can still get life insurance if you use marijuana. Just be upfront about it during the application process to avoid any issues later.
Myth 2: Life Insurance Is Only for Older People
You’ve probably heard someone say, “I’ll think about life insurance when I’m older.” It sounds logical at first—after all, why would you need life insurance if you’re young and healthy? But that’s where the myth starts to fall apart.
Reality: The best time to get life insurance is actually when you’re younger. Why? Because your premiums will be lower. Life insurance is all about managing risk, and when you’re younger and healthier, you’re considered less of a risk to the insurance company. This means lower monthly payments compared to someone who waits until they’re older or have health issues. Plus, getting life insurance while you’re young locks in a lower rate for the duration of the policy.
Even if you don’t have dependents right now, life insurance can still make sense for covering any debts or funeral expenses that could fall to your family.
Myth 3: Life Insurance Through My Job Is Enough
It’s easy to think that the life insurance policy provided by your employer is all you’ll ever need. After all, it’s there, and it’s often affordable or even free as part of your benefits package. But this assumption can leave you underprotected.
Reality: Employer-provided life insurance is a nice benefit, but it may not be enough. These policies are often for smaller amounts, like one to two times your annual salary. While that might sound like a lot, think about all the financial responsibilities that might fall on your loved ones if something happened to you—mortgage payments, college tuition, daily living expenses, etc. That employer policy might not cover everything.
Also, here’s the kicker: If you change jobs, you might lose that coverage altogether. Having your own separate policy ensures you’re covered no matter where you work.
Myth 4: Life Insurance Is Too Expensive
This is a big one. Many people skip getting life insurance because they assume it’s going to cost them an arm and a leg. This myth is especially powerful among younger people who might not feel financially secure yet.
Reality: Life insurance can be surprisingly affordable. The cost depends on several factors, including your age, health, the type of policy, and the amount of coverage you need. For many people, term life insurance (which provides coverage for a specific period, like 20 or 30 years) can be very budget-friendly. It’s not uncommon for a healthy person in their 20s or 30s to pay as little as the cost of a few cups of coffee each month for significant coverage.
Don’t let the fear of cost keep you from exploring your options. You might be pleasantly surprised by how affordable peace of mind can be.
Myth 5: Only Breadwinners Need Life Insurance
It’s easy to think that life insurance is only necessary for the family’s primary breadwinner. But what about stay-at-home parents, caregivers, or anyone else who contributes in non-financial ways?
Reality: Life insurance is important for anyone who provides value to their household, not just those who earn a paycheck. Stay-at-home parents, for example, provide services that would cost a lot of money to replace—childcare, cooking, cleaning, and more. If something were to happen to them, the surviving partner would likely need to pay for these services, and that can add up quickly. Having life insurance on both partners helps cover those potential costs and ensures the family can continue to function financially.
Final Thoughts: Demystifying Life Insurance
Life insurance doesn’t have to be a confusing maze of misinformation. By separating myths from reality, you can make smarter decisions that protect your loved ones and your financial future.
Whether you’re young and healthy or have a few health concerns, there’s likely a policy that fits your needs. Don’t let the myths hold you back from exploring your options and getting the coverage you deserve.
