The 5 Biggest Life Insurance Myths... Debunked!

Life insurance is commonplace in today’s society, but that doesn’t mean it’s commonly understood.

Below are five life insurance myths and facts that debunk them. As you prepare for your next appointment, consider broaching the subject of life insurance at different life stages with this information in mind.

Myth #1: Life Insurance Costs Too Much

It’s probably less than they think! Odds are you’ve probably heard this point plenty of times. LIMRA and Life Happens’ 2025 Life Insurance Barometer Study tells us that 46 percent of people with a need gap won’t buy life insurance because they think it costs too much.

One of the primary things to keep in mind while you’re practicing your insurance sales pitch is that about 75 percent of adults overestimate the actual cost of life insurance!

How can you fight the collective misbelief that the price of life insurance is just too high? Show them the numbers by handing them an illustration. You can also try giving them a comparison to which they can relate.

According to the Bureau of Labor Statistics, the average household dishes out $3,228 a year to eat away from home. That’s $269 per month. NerdWallet reports the average cost of life insurance is $26 per month!

Your potential clients could spend only approximately $312 a year on a life insurance policy, just to simply guarantee peace-of-mind and security. Wouldn’t that be worth giving up a few Happy Meals?

How can you fight the collective misbelief that the price of life insurance is just too high? Show them the numbers with illustrations!

Myth #2: Buying Life Insurance Online Is Easier & Cheaper

Not always. These days, consumers will bargain hunt and purchase select products at lower prices online. What some don’t realize, however, is that life insurance policies aren’t always cheaper online.

Guaranteed issue or simplified issue products found online don’t require applicants to go through the full underwriting process. Since insurers take on more risk with these policies, they often charge higher premiums.

Additionally, insurers may add specific terms and conditions in policies bought online that could limit the policyholder’s current or future benefits. Shoppers unfamiliar with insurance jargon could have a harder time finding and understanding these clauses, and it could cost them.

In Life Happens and LIMRA’s 2025 Insurance Barometer Study, nearly 60 percent of young adults stated they’d use an AI tool to research a policy. When ready to purchase a policy, however, 42 percent say they’d prefer to buy in person with a financial professional and 30 percent say they’d prefer to buy directly from an insurance company using phone, mail, or an online video service.

During your sales appointments, inform your clients of the dangers of navigating the online market and the value of underwriting. In addition, let them know how your experience and knowledge can help them get the policy that best suits their needs.

You’re not only potentially saving them from a costly purchase, but you’re also giving them more reason to come back to you in the future if they’re not ready to buy that day.

Myth #3: Only Medical History Affects Its Premiums

There’s more to it! While most people know their medical history affects the price of life insurance, it seems many are not aware of a number of other variables that insurers look at before offering them coverage at certain rates.

Many people aren’t aware of all the variables insurers look at before offering them coverage at certain rates.

Most people are aware that their health history can impact their life insurance premiums. Make sure your clients shopping for life insurance are aware that there are other factors that can impact how much they pay for coverage.

Consider things such as activity level, credit score, and marital status. To build a stronger rapport and more trust with your clients, ask if they know what factors can affect the cost of their life insurance policy. If they can’t name them all, let them know what factors they’re missing and why these factors affect their premiums.

Myth #4: It’s Only Good for Funerals & Inheritances

That’s just not true! An unfortunate stigma attached to life insurance is that of death. Traditionally, people bought life insurance solely for its death benefits, and these benefits are why many still do.

Covering burial and final expenses is the top reason many Americans (60 percent) gave for owning life insurance in LIMRA’s 2025 study. Just over 40 percent stated they own it so they can transfer wealth or leave an inheritance.

As you’re talking with clients, remember to put the life back into life insurance. Lay out and explain all of its possible living benefits.

If you’re working with older adults with no kids, point out that they can use life insurance to generate cash flow in retirement. For young parents, make sure to mention that they could use it down the road to pay for their kids’ college tuition. In addition, cover the riders they can add to their policies that offer living benefits, such as accelerated benefit payouts if critical illness strikes.

As you’re talking with clients, put the life back into life insurance. Explain all the living benefits!

Not selling life insurance yet? Offering final expense insurance is a great way to start. Download our complete guide to selling final expense insurance to learn more!

Myth #5: It’s OK to Wait to Purchase Life Insurance Policies

No, not if they need one! Nearly half of those surveyed by LIMRA in 2025 said they’d face financial hardship within six months if the primary wage earner were to pass away.

Deep down, your prospects probably know they shouldn’t put off buying life insurance, but it’s something they need to be reminded of. Why? When they’re making a budget and listing the items they believe their money needs to go toward, chances are, life insurance premiums may not make the cut.

Those who are young and healthy might look at the glass half full and blindly trust that they have more time. Others place items that will bring them instant or near future gratification higher on the list. At the bottom of it all, a number of people don’t make life insurance as much of a priority as it should be.

As humans, it’s not grim to consider our days numbered, rather it’s wise and realistic. We’re all aware that our health can change in the blink of an eye and decline as we age.

However, people still wait… and wait… to buy life insurance. Some do so unaware that putting off buying a policy until they’re older will likely end up costing them more, especially if they or a close family member suffers from a critical illness during that time.

When it comes to marketing life insurance, remember that, while covering the facts about life insurance is key to expelling the myths, just bringing the product into the conversation is a major step. Sometimes, people need that extra reminder of the urgency of the situation to shift their priorities and make the right move.

Did you know Ritter offers a Life & Annuities Resource Center? Access all our tools and sales support for free when you register with RitterIM.com today.