The Facts and Myths of Life Insurance

Alden Wicker

Over the past couple of decades, something alarming has been happening: The percentage of people signing up for life insurance is on the decline.

Only 40% of adult Americans have life insurance. Of widows and widowers whose spouses died prematurely (between the ages of 30 and 55), only a quarter felt their spouses had adequate life insurance.

Why are Americans failing to pick up coverage? It may be because they misunderstand the cost and benefits of it.

RELATED: Are You Spending Too Much on Life Insurance?

So we’re here to correct a few misconceptions that have been floating around about one of the most important policies you can get.

After you’ve learned a bit more about what it entails, quiz yourself on your life insurance knowledge.

Life Insurance: The Ideal vs. the Reality

Roll over each statistic to find out whether it is a fact or myth.

To download an image of this infographic, click here for the myths and here for the results!

  • QualityTermLife

    It’s really tragic that so many who are breadwinners with minimal savings and dependents don’t have life insurance.

    And ironic that they may not own life insurance because they think it is more expensive than it actually is.

    Obviously, the solution to that misconception is to go look at real rates to see how affordable they are. You can easily check out the cost of term life using an online term insurance quoting engine.

    Quality Term Life’s website has one that is free, easy to use and anonymous.

    There’s never been a better time than now – rates are lower than ever. Protect your loved one’s future, today.

  • sjdemo

    here’s another one for you: fact– when the worst happens there is no such thing as a grace period. my mother’s homeowner’s insurance sent a 2nd notice bill for her policy three days before her house burned down (with her in it) and when we tried to make the payment five days after that (but before the stated due date) they refused to accept it. we are fighting them but it’s extremely unpleasant to say the least.

    moral of the story: pay your policies on time, and make sure your parents pay theirs.

    oh, and she didn’t have life insurance.

  • QTL

    You left out the most important one. The myth that has left 40% of Americans without adequate life insurance. Life insurance is too expensive.

    There are a lot more reasons than those given for Mom to have life insurance.

    The best way to dispel that my is to go look at how affordable rates really are. You can easily check out the cost of term life using an online term insurance quoting engine. You can find one at QualityTermLife’s website that is fast and easy to use, which compares prices from dozens of reputable insurers.

    You can see that almost everyone in reasonably good health can afford to own life insurance.

  • Paris

    Where is all of this life insurance stuff coming from? General rule of thumb is that you don’t need life insurance until you have dependents. I don’t know what the incentive is for LV with this article, but I’m not buying it.

    • Jason

      It sounds like LV agrees with you based on this statement:

      “If you have large private student loans, are supporting your partner or other family members or share a mortgage with your partner, life insurance is a good idea.”

      They are taking into account the fact that many dependents are not children, and many types of liabilities will remain after death.

  • Bill Brunett

    The fact is that life insurance is a for profit business, and if everyone could do some long term planning instead of buying policies there would be more money for each family in the event of a disaster. If payments are sent to insurance companies, not all of those payments come back to the families that paid them, so reducing overall life insurance coverage in the country would increase available funds.

    • Scott Glynn

      It’s as much about leveraging your money. If I can pay $25,000 in premiums to pay off a $500,000 mortgage in the event of my demise, my spouse has effectively earned $475,000 without lifting a finger and able to maintain her lifestyle

    • jesse

      You have no idea what you are talking about. Your correct its a buisness but thats about it. Usually I Dont go out of my way to correct people on the internet because thats rude but your way of thinking is totally misguided. First off if you just save your money in the bank as opposed to a life insurance policy you are being taxed where as most all death benefits you receive from an insurance company are untaxed to your loved ones. Secondly life policies are cheap if you dont wait until your old and riddled with heath problems and the pay out is more than you will ever pay them. For example whole life policies are designed to where you won’t actually have given them the amount your covered for until you are a hundred years old. With the life expectancy where it is today you’ll probably be dead for 20 years before you pay off everything so there is free money right there. Thirdly for my policy the company I go through is giving me 4 times the interest on the cash value I develop than I would receive through my bank so for the decades you have your policy you are making your money work for you as opposed to sitting in a bank account you made doing nothing. I sell life insurance so I know my stuff. I could go on and on but basically I’ll just say make sure you do more research before giving people advice. You could have turned a lot of people off to life insurance in the past year that could have really benefited from it. Everyone should research the subject on their own. You are going to die. Plan for it so the ones you leave behind are properly taken care of.