10 myths of life insurance, debunked

The short answer

Most life insurance myths come from mixing it up with a different product (mortgage insurance, group benefits) or treating it like an investment instead of protection. The core truth underneath all 10 myths below: life insurance exists to replace what your income and presence provide, for the people who depend on it, and it's usually more affordable and more straightforward than people assume.

Myth 1: "My group life insurance at work is enough"

Group life through an employer is real coverage, but it's usually capped low (often one to two times your salary) and it ends when you leave the job or retire, right when you might need it most and be older or less healthy when reapplying. It's worth keeping as a supplement, not a replacement for a personal policy.

Myth 2: "My mortgage insurance covers my family"

Mortgage insurance offered by your lender pays off the mortgage balance if you die, nothing more, and the payout typically goes to the lender, not your family. Personal life insurance pays a death benefit directly to whoever you name, for whatever they need, mortgage, income replacement, or anything else.

Myth 3: "I'm too young to need it"

The younger and healthier you are, the cheaper your premium usually is, and it's often locked in for the length of your term. Waiting until you feel "ready" usually just means paying more for the same coverage later.

Myth 4: "It's better to save the money myself"

Saving is good, but it takes years to build a meaningful cushion. Life insurance provides that cushion immediately, from day one of the policy, for a fraction of what it would take to save the equivalent amount.

Myth 5: "It's a hassle to apply"

Many Canadian term policies today can be quoted and applied for entirely online. Simplified-issue options skip the medical exam altogether in exchange for a short health questionnaire, though they cap coverage lower.

Myth 6: "I don't get my money back if I don't die, so it's a waste"

Term life insurance works like home or car insurance: you're paying for protection during the term, not for a refund. If you want a policy that builds cash value over time, that's a different product, permanent life insurance, usually at a higher cost.

Myth 7: "The insurer will find a way to deny my claim"

Once premiums are paid and the application was answered honestly, the insurer is contractually obligated to pay a legitimate claim. Most policies also have a 2-year contestability period, after which they generally can only contest for fraud. See our full breakdown of when claims can be denied.

Myth 8: "I'm too old, or not healthy enough, to qualify"

Pricing does increase with age and health conditions, but declines are less common than people expect. Simplified-issue policies exist specifically for people who might not qualify for a fully underwritten policy at a standard rate.

Myth 9: "A stay-at-home spouse doesn't need coverage"

A stay-at-home spouse's unpaid work, childcare, household management, has real financial value. Replacing it after an unexpected death can be expensive, which is a real cost even without a salary attached to it.

Myth 10: "Life insurance is expensive"

For a healthy person in their 30s, $500,000 of 20-year term life insurance often costs somewhere in the $20 to $36 a month range. See our full cost breakdown by age for specifics.

Where these myths tend to come from

Most of these myths aren't random. They usually come from somewhere real: a friend's bad experience, a policy that got confused with a different product, or advice that made sense decades ago but doesn't reflect how coverage works today. Mortgage insurance and group life, for instance, are both legitimate products, they're just not substitutes for a personal policy sized to your family's actual needs. And the "it's a hassle" myth used to be truer before online applications and simplified-issue plans existed. Checking a belief against how life insurance actually works today, rather than how it worked or how it's perceived, usually clears most of these up in one conversation.

Why busting these myths matters

Each of these misconceptions tends to point in the same direction: delay. Waiting because you're "too young," assuming work coverage is enough, or believing the process is harder than it is, all lead to the same outcome, going without adequate protection longer than necessary. None of these are permanent decisions. A quote takes a few minutes and doesn't commit you to anything.

What to do next

If any of these myths were part of why you've put off getting covered, the fix is usually a quick quote to see your actual number. Get an instant quote or read do I need life insurance if you're still deciding whether you're in the group that needs it.

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About the author

Philip Setter has been a licensed life insurance advisor since 2014 and founded Affinity Life in 2020. He's a climber, ice climber and ski tourer based in Calgary.