Life insurance is often thought of as something optional, but in reality, it can be one of the most meaningful financial gifts you give to your loved ones. While nothing replaces your presence, life insurance provides security and stability when your family needs it most. Unfortunately, a few persistent misconceptions stop many people from getting the coverage they truly need. Let’s break them down.
Myth #1: My employer’s life insurance is enough.
Many companies do offer life insurance as part of their benefits package, but the coverage is usually minimal—often just one or two times your annual salary, or in some cases, a flat amount such as $20,000. While this may sound like a decent cushion, the reality is far different. With average funeral costs running between $7,000 and $10,000, and other unexpected expenses on top of that, employer coverage can disappear quickly.
If your family relies on your income, that limited benefit may not even last a year. Financial experts typically recommend coverage worth 10 to 15 times your salary—far more than what most employers provide.
Myth #2: Work-provided coverage lasts forever.
It’s a common assumption that life insurance from your employer will always be there, but that’s rarely true. In most cases, if you leave your job, retire, or get laid off, the coverage ends. Even if you plan to stay long-term, your employer could change or eliminate the benefit altogether.
Supplemental coverage through your workplace might be available, but it isn’t always portable and can sometimes cost more than an individual policy, especially as you age. For lasting protection, it’s smart to have a personal plan that follows you no matter where your career takes you.
Myth #3: Life insurance is too expensive.
Many people overestimate the cost of life insurance—sometimes by three to six times its actual price. In fact, younger and healthier individuals are often surprised by how affordable it can be. For example, a healthy 30-year-old could typically purchase a 20-year, $250,000 term life policy for around $13 a month. That small monthly expense translates into a significant safety net for your family.
The Reality
Life insurance isn’t just about covering funeral costs—it’s about providing your loved ones with financial breathing room. It ensures they can grieve without immediately worrying about bills, childcare, or lost income. It can also help fund long-term needs like education, retirement planning, or maintaining a family business.
Starting the conversation with your partner or a financial advisor is the first step. The process may take some time depending on your health and the type of policy you choose, but the peace of mind it provides is worth it.
