Exposing the Harsh Reality – Demolishing 5 Widespread Myths that Could Leave You Financially Vulnerable

Written by Armando Paz, Jr. RFC

Connect with me on LinkedIn if you are a Medical professional or firm, concerned about replenishing your personal or staff’s retirement income or cash flow in the event of a disruption, due to becoming sick or hurt.

June 23, 2023

Are you seeking peace of mind and financial security? Who isn’t, right? Well, look no further than life insurance. Surprisingly, research from LIMRA reveals that a whopping 41% of Americans lack sufficient life insurance coverage, and over 106 million individuals are living with a life insurance gap. Let’s debunk some prevalent myths about life insurance and empower you to make informed decisions about your financial future.

Myth #1: “I’m young, healthy, single, and have no dependents, so I don’t need life insurance.”

Truth: The best time to purchase life insurance is when you’re young. While it’s commonly associated with individuals who have families, homes, and financial obligations, life insurance can benefit everyone. It can help you manage debts, repay student loans, and cover funeral expenses. Additionally, securing life insurance while you’re young and healthy means lower premiums.

Though it may be challenging to foresee your lifelong need for life insurance, the earlier you obtain coverage, the more cost-effective it will be.

Myth #2: “Life insurance is expensive.”

Truth: Life insurance is the simplest and most affordable way to achieve security and peace of mind. Many individuals overestimate the cost and end up not purchasing coverage. The price of a policy depends on factors such as age, health, policy type, and coverage amount. In fact, term life insurance for a healthy 30-year-old can be as affordable as $130 per year ( the average is around $14 per month), according to LIMRA’s 2022 Insurance Barometer.

Myth #3: “Life insurance only benefits my loved ones after I’m gone.”

Truth: Life insurance offers more than just death benefits. While it’s widely recognized as a means to financially support loved ones after the policyholder’s passing, it’s lesser known that you can utilize life insurance while you’re still alive. With a living benefits rider, you can access policy funds while you’re alive, under certain conditions. If you’re certified as permanently chronically ill, the rider may provide a lump-sum or monthly payment deducted from your total death benefit. Moreover, cash-value life insurance policies allow you to access accumulated cash value through withdrawals and loans to meet your financial needs.

Myth #4: “Life insurance isn’t necessary after retirement.”

Truth: Life insurance can greatly benefit retirees. While your life insurance needs may change upon entering retirement, there are still valuable ways to leverage life insurance. It can help cover outstanding debts, medical costs, and even create an inheritance. Additionally, life insurance can replace retirement income and assist in paying final expenses. As previously mentioned, the cash value accumulated through permanent life insurance policies can serve as a supplemental income source during retirement or offset various expenses.

Myth #5: “The life insurance I receive through my job is sufficient.”

Truth: Most employer-sponsored plans fall short of providing complete coverage. More than 100 million Americans have employer-sponsored life insurance, often at an affordable or even free cost. However, these plans typically do not offer comprehensive coverage to meet your financial needs. Even if your company offers life insurance matching your salary, many experts recommend having a policy worth at least ten times your annual income. Furthermore, most employer-sponsored plans are not “portable,” meaning you lose coverage if you change jobs or retire.

Truth: Part 2: Facing a serious medical condition is an immense challenge. The added blow of losing your workplace life insurance due to termination can intensify the strain. It can make you feel defenseless and unprotected, struggling with the heaviness of upcoming financial responsibilities. The thought of mounting medical bills and an uncertain future can be distressing. However, during trying times, the significance of securing independent life insurance becomes clear. It becomes a beacon of hope, offering solace and peace amidst the turbulence, providing the reassurance that your family will be protected from the “What If’s” that life’s trials may bring. With the right coverage in place, you can find strength in knowing that you have taken proactive steps to safeguard your loved ones and create a more secure future.

The Bottom Line: Life insurance holds far greater relevance and accessibility than most consumers realize. By educating our clients, we aim to help you grasp the numerous benefits it offers, leading you toward a financially secure future. Don’t miss out on the opportunity to safeguard your loved ones and achieve peace of mind.