Myth: Life Insurance Is Too Expensive

One of the most common things we hear from people considering life insurance is, "I'd like to have it, but it's probably too expensive."

It's an understandable concern. Most people haven't shopped for life insurance recently, and many aren't sure how much coverage they need or what their options are.

The surprising reality is that cost is often not the obstacle people think it is.

According to the 2024 Insurance Barometer Study from LIMRA and Life Happens, the number one reason people give for not buying life insurance is that they think it's too expensive. Yet the same study found that 72% of Americans overestimate the cost of a basic term life insurance policy. More than half of those estimates, 54%, were based on a "gut instinct" or a "wild guess." [limra.com], [lifehappens.org], [portal.equitable.com]

That tells us something important: many people are making decisions about life insurance before they've ever looked at an actual quote.

As an independent insurance agency, we see this happen all the time. People come to us assuming coverage will be outside their budget, only to find that there are more options available than they expected.

Life Insurance Is More Flexible Than Most People Realize

A common misconception is that life insurance comes in one version with one price tag.

In reality, coverage can be tailored to fit your needs, priorities, and budget.

Policies can be customized based on factors such as:

• The amount of coverage you want

• How long you want coverage to last

• Your age and health

• Family and financial responsibilities

• Long-term goals

• Monthly budget

  
  

For some families, the goal is income protection. For others, it's helping cover final expenses, protecting a home, providing funds for education, or leaving something behind for loved ones.

The point is that life insurance is not a one-size-fits-all product. The right policy should be built around your situation.

Putting the Cost Into Perspective

When evaluating life insurance, it can be helpful to compare the cost of coverage with the financial responsibilities many families already carry.

Final Expenses

According to the National Funeral Directors Association's 2023 General Price List Study:

• The median cost of a funeral with viewing and burial was $8,300. [content.nfda.org]

• The median cost of a funeral with viewing and cremation was $6,280. [content.nfda.org]

• When a burial vault is included, the median cost rises to $9,995. [content.nfda.org]

  
  

The NFDA notes that these figures do not include cemetery costs, monuments or markers, flowers, obituaries, or certain other expenses. [content.nfda.org]

For many families, life insurance is one way to help ensure those costs do not become an immediate burden during an already difficult time.

Education Costs

Many parents and grandparents also consider life insurance as part of a larger plan to help protect future educational goals.

According to the College Board's Trends in College Pricing and Student Aid 2024 report, average published tuition and fees for the 2024-25 academic year were:

• $11,610 at public four-year in-state institutions. [research.c...eboard.org], [nasfaa.org]

• $30,780 at public four-year out-of-state institutions. [research.c...eboard.org], [nasfaa.org]

• $43,350 at private nonprofit four-year institutions. [nasfaa.org]

Every family's education plans are different, but these numbers highlight why financial protection remains an important consideration for many households.

Many Americans Still Feel Underinsured

LIMRA reports that 42% of American adults, representing approximately 102 million people, say they need life insurance or need more coverage than they currently have. [limra.com], [portal.equitable.com]

Even among people who already own life insurance, 22% say they do not have enough coverage. [limra.com], [lifehappens.org]

Those figures suggest that many people understand the value of life insurance but may not realize how accessible and customizable the options can be.

Why an Independent Insurance Agency Can Help

One advantage of working with an independent agency is choice.

Because we work with multiple insurance carriers, we can help clients compare options and find coverage that aligns with their specific goals and budget.

That may include:

• Comparing rates from multiple insurers

• Reviewing different coverage amounts

• Exploring policy types that meet your needs

• Adjusting coverage to fit a comfortable budget

• Identifying gaps in existing coverage

  
  

Our job is not to push a particular product. Our job is to help you understand your options and make an informed decision.

The Bottom Line

The belief that life insurance is too expensive is one of the most common myths we encounter.

The data shows that most Americans significantly overestimate the cost of coverage. At the same time, millions acknowledge that they have a gap in their financial protection. [limra.com], [lifehappens.org], [portal.equitable.com]

The good news is that life insurance is highly customizable. Whether your goal is helping cover final expenses, protecting your family's financial future, supporting educational goals, or simply creating peace of mind, there may be solutions that fit both your needs and your budget.

The first step is not buying a policy. It's getting the facts and exploring your options.

Sources

• LIMRA, 2024 Life Insurance Fact Sheet [limra.com]

• Life Happens & LIMRA, 2024 Insurance Barometer Study [lifehappens.org], [portal.equitable.com]

• National Funeral Directors Association (NFDA), 2023 General Price List Study [content.nfda.org]

• College Board, Trends in College Pricing and Student Aid 2024 [research.c...eboard.org], [nasfaa.org]