Don't Fall for These 7 Life Insurance Myths

Buying life insurance is an important financial decision. In an era when anyone with a microphone can start their own financial podcast or declare themselves an influencer on social media, it can be difficult to know who to trust and what information is pertinent to your situation.

Coverage is not a one-size-fits-all solution. What works for your neighbor may not be the right answer for you. AAA Life works with families in unique circumstances every day, and we pride ourselves on being a trusted partner to anyone seeking guidance on coverage. Here are some common misconceptions we regularly hear, and what we think you should consider if any apply to you.
 

Myth #1

“I already have coverage through work, I’m all set.”

If your employer offers life insurance as part of your benefits package, you should absolutely take advantage. But life insurance through work is a perk, not a plan. Most employers offer one or two times your annual salary in coverage. Maybe that’s enough for your family to get by for a year or two, but for most people, it’s not enough. What happens in that third year? And beyond?

Additionally, there are no guarantees that your employer will continue to provide the same level of coverage, and you could be left scrambling if you change jobs or your employment is terminated. The loss of a loved one can create a financial burden with long-term impacts, and a supplemental individual policy can help ease the sudden loss. Learn more about supplementing your employer-provided insurance by clicking here.
 

Myth #2

“I’m young, I really don’t need to think about life insurance yet.”

We all think we have time, but life is unpredictable. It can be especially risky to be without coverage if you’re in your 20s or 30s and have a young family. Suddenly, a two-income household is down to a single person to handle every expense. With life insurance coverage, the death benefit can ease that stress and help your family maintain its quality of life. It’s a way to hope for the best, but plan for the worst.

Thankfully, there’s a benefit to getting coverage when you’re young. Coverage is typically less expensive when you’re young and healthy. A pre-existing condition later in life – while not necessarily a barrier to coverage – could impact the rates available to you. By acting today, you’re better prepared for whatever’s next.
 

Myth #3

“I’d like to get covered, but life insurance is too expensive.”

According to the Life Insurance Market Research Association, the perceived cost of life insurance is among the top hurdles in finding coverage. They estimate that the youngest and healthiest adults overestimate the cost of coverage by as much as 10-12 times.¹ AAA Life offers coverage starting around $8 per month.² 

That’s a massive difference when looking at your budget, thinking that the most affordable coverage might cost $80-$96 a month instead of a figure more comparable to a coffee drink from your favorite local café.
 

Myth #4

“The house is paid off, and the kids are out of college; I can get rid of my policy.”

Not so fast! Life insurance is a form of end-of-life planning. Retirement accounts, like 401(k)s are subject to external market fluctuations. Ideally, you’ll be living off this money for two or three decades once you retire. Life insurance can help ensure that your spouse or partner is OK financially in retirement and provides some security should you be hit with any unexpected expenses.

Beyond that, life insurance is a way to help leave the legacy you want to leave. Even if your children are stable financially, you may have grandchildren whose future education costs you want to contribute to, or maybe you decide that some of what you’re leaving behind should go to a favorite charity.
 

Myth #5

“I don’t want to jump through all the hoops of a medical exam.”

Nobody likes going to the doctor. A health screening, which is a requirement for some life insurance policies, is different than a medical exam. Your screening can be done where you want, and when you want. Screenings are short (generally around 30 minutes) and conducted by a licensed medical professional who can come to your preferred location, whether that’s your home, office or a local screening facility.

These screenings are not invasive – they are general assessments of your health. The benefit is that if you’re relatively healthy, this can be a way to get your best price. Some policies do not require any health screening, but a screening confirms that you’re getting the best rate available to you. Read more about health screenings and watch a helpful video by clicking here.
 

Myth #6

“I’ll buy term and invest the difference.”

On its face, this seems to make sense. If you’re young and in good health, you need the most coverage you can afford, and typically, term life is the less expensive option. But what happens when your term ends in 20 or 30 years? You may still need coverage, and your health circumstances may have changed over time. Or, you may need ongoing coverage to help care for an ailing family member.

The solution might be a combination of term life and whole life insurance. Learn more about different types of insurance and how to get started.
 

Myth #7

“I’ve been fortunate to have built up a healthy savings. My family will be fine relying on that.”

Life insurance is about planning for the unplanned. No one likes to think about, let alone plan for, the end of their life. It’s an unfortunate reality that medical emergencies or extended illnesses can quickly drain even a large savings account. If that’s the only bucket your family is counting on having, it might be too late to add a supplemental policy if your circumstances suddenly change.

Coverage with AAA Life is a way to find additional financial security and know you’ll have something that your family can count on, no matter what the future holds.
 

Let us help

Those are just a few of the “what-if” scenarios that are only logical to consider when making a decision that impacts your financial future. Remember, you don’t have to go at this alone. Our Life Specialists can help you when you’re ready to take the next step.

¹2025 Insurance Barometer Study – Report 2: Life Insurance in the (Mis)Information Age. Life Happens and LIMRA. June 25, 2025.

²Rates indicated are for a AAA member, automatic monthly payment, best class, non-nicotine.