There are many things to worry about currently, so thinking about life insurance is probably not on your mind. Maybe you think you don’t need it because you’re not old, or you heard one of the many stories about someone trying to take someone else’s life insurance money, or maybe it simply doesn’t fit your budget right now. Whatever the reason is, being informed on what is true and what is not about life insurance will help you in the long run. So, here are six common misconceptions about life insurance.
- Life Insurance is Too Expensive
While life insurance can be expensive, a lot of the anxiety about the prices is due to overestimation. In 2025, LIMRA (Life Insurance Marketing and Research Association) conducted a study on why young adults weren’t buying insurance. This study revealed that 37% of Gen Z adults and 46% of Millennials didn’t buy insurance because they thought it was too expensive.
When asked to guess the premium of a $250,000 20-year term policy, “healthy adults ages 18 – 30 overestimated the median cost about 10 – 12 times more than its true cost.” The USNews website breaks down all the nuances in different plans, but let’s take an example from there for comparison: a 30-year-old female with average health and no history of smoking will pay a rate of $42.12 for a 20-year term policy worth $1 million.
- Only Older People Need Life Insurance
Life can be very unpredictable, and things can develop or fall apart with little notice. Getting insurance early can keep the rate fixed at a lower amount than it would be much later down the line. Depending on the type of policy you get, it can stay with you for 10 years up to your entire life. Also depending on the type of policy, the money in the plan can remain fixed or grow your cash value, which can be borrowed against tax free. With a plan in place early, you’re prepared for if a preexisting condition develops, or a financial emergency arises.
- People With Preexisting Conditions Can’t Be Insured
Having a preexisting condition like diabetes, cardiovascular disease, or any other condition that you’ve been treated for, will unfortunately likely raise the price of the insurance. However, that doesn’t mean there are no options. Term and Whole life insurance with lower premiums are still open, but there’s also Guaranteed and Simplified Issue policies, which are close to instant and require no medical exam at a higher premium cost.
- Stay-At-Home Parents Don’t Need Insurance
Insurance must be paid for, so someone who stays in the house can’t get their own insurance, and it might not seem like that big of a deal. However, if they pass away, the cost of childcare will very quickly become apparent. According to the World Population Review’s website, the annual cost of taking care of an infant in the state of Maryland in 2025 was $18,946, and the cost of taking care of a 4-year-old was $13,335. With the rates of inflation going the way they are, that number is probably only going to rise, and a recently single parent may not have enough money to pay for everything needed.
- Workplace Life Insurance is Enough
Some workplaces offer life insurance to their workers as a way to financially protect the families of those workers in case of an untimely death, and while this is a fast and cost-effective way to get insurance, it’s not a suitable one for the long term. Workplace insurance like this has a set maximum it can give you, usually either one or two times the amount of your annual salary or a fixed number like $40,000. This insurance is also usually tied to employment status, so if you lose the job, the insurance goes as well. Even while working, part-time workers may not get insurance, and it may be restricted if you’re on leave for any reason.
- Only People with Dependents Need Life Insurance
Life insurance can be used for many things; one of which is taking care of dependents, yes, but the options don’t stop there. You can use life insurance to pay off mortgages and loans, make sure your funeral doesn’t dent anyone’s pockets, support family and friends, even donate it to charity if you wish. You pay for the insurance, so the money is yours to do whatever feels right.
Where to Start the Conversation
Life insurance still has a lot of complicated moving parts, and it can feel very overwhelming and confusing. So, the best thing you can do to make sure that you’re getting the most out of your insurance is to talk to a financial consultant and do some of your own research. The consultants at Crossroads Insurance GRP focus on personalized guidance based on your goals, and they’ll keep it as clear as possible to avoid further confusion.
Learn more about Crossroads Insurance at https://crossroadsinsurancegrp.com/.