Life insurance often comes with a cloud of misunderstandings, and for many in the Asian American and Pacific Islander (AAPI) community, these misconceptions can lead to gaps in coverage. While data shows that Asian Americans have one of the smallest protection gaps compared to other groups, millions still remain underinsured. Let’s take a closer look at some of the myths that hold people back from securing the right coverage.
1. Life Insurance Is Too Expensive
A major reason many people hesitate is the belief that life insurance is unaffordable. In reality, the cost is often far lower than most assume. Studies show that people tend to overestimate the price by several times. By comparing options across different providers, it’s possible to find policies that fit comfortably within a budget. The truth is, life insurance is often one of the most cost-effective financial protections you can buy.
2. My Work Policy Is Enough
Employer-provided life insurance is a great benefit, but it usually doesn’t go far enough. Most workplace policies offer coverage equal to just one or two years of salary. When you consider ongoing family expenses like housing, childcare, tuition, or debt repayment, it’s clear that this limited coverage may not stretch as far as you’d hope. Another concern is that employer coverage is tied to your job—if you leave, the policy often doesn’t follow you. Having your own policy ensures stability no matter where your career takes you.
3. Life Insurance Only Matters After Death
Another misconception is that life insurance is only useful once you’ve passed away. Many policies now include living benefits, which means they can provide financial support if you face a serious illness or disability. Certain permanent policies also build cash value, which can be tapped into for things like college costs, buying a home, or even supplementing retirement income. Life insurance isn’t just about protecting others after you’re gone—it can also serve as a flexible tool during your lifetime.
4. Savings Alone Are Enough Protection
The AAPI community has a strong tradition of saving, but savings can be quickly depleted if they need to cover medical bills, outstanding debts, or daily living costs in the event of an unexpected loss. Life insurance acts as a safeguard, ensuring that your family doesn’t need to drain hard-earned savings or sacrifice long-term goals like retirement or passing on wealth to the next generation. Think of it the way you do with other forms of insurance—you pay a small amount now so you don’t risk losing a much larger amount later.
5. I’m Too Young to Worry About This
It’s easy to think of life insurance as something for later in life, but starting early has significant advantages. Premiums are typically lower when you’re young and healthy, and locking in those rates now can save you money over the long term. Waiting until health issues appear could mean higher costs—or even the possibility of being denied coverage altogether. Starting young is one of the smartest financial decisions you can make.
Life insurance is not just about preparing for the worst—it’s about creating security and peace of mind for yourself and your loved ones. By clearing up these misconceptions, the AAPI community can take meaningful steps toward stronger financial protection for today and the future.
