September 08, 2023
By Sylvie Tremblay

During your lifetime, you’ll probably take on a bunch of financial responsibilities. These can include car loans, a mortgage, tuition fees, and more. These debts generally don’t disappear when you die.

You can help protect your loved ones’ finances by getting life insurance. It delivers a specified sum of money to your beneficiaries in case you die. This can help your family with any debts, living expenses, medical expenses, and more.

However, there’s a lot of myths surrounding life insurance. Here’s the truth behind four false beliefs.

Myth 1: Life insurance is too expensive

Life insurance doesn’t have to be expensive. The best way to get a good price? Get permanent life insurance while you’re still young. “Age is the primary driver determining the cost of life insurance," explains Darren Devine, Sun Life advisor. “The younger you are, the more likely you are to have lower premiums.”

If you’re on a tight budget, consider term life insurance. This type of insurance offers a short-term solution. It covers you in the event of death for a fixed period up to a certain age (e.g., 75 or 80). "If you’re young and healthy, your premiums could be as low as $30 a month," says Devine. “It’s a great way to get what you want without compromising your budget."

Term life insurance often costs less upfront. However, the premium is not fixed for life. It increases every renewal period.

That’s why it’s possible to upgrade most term life insurance policies to permanent life insurance. Permanent insurance offers lifelong protection, often at a fixed rate.

Myth 2: Life insurance coverage through work is enough

Employer-sponsored life insurance has its limits.

“The main problem is that it doesn’t belong to you. The company owns it. And they have the right to change it at any time,” says Devine.

You may be left with inadequate coverage if your employer changes your plan. For example, the new policy may not cover all your financial obligations, such as paying off a mortgage. And what if you leave your job? Well, then you’ll no longer have access to it.

You may be able to convert your group life insurance into individual life insurance. But it may not have the same features and benefits compared to an individually owned plan. As a result, your new policy may not offer the protection you want.

Choosing individual life insurance gives you greater control and stability. You can choose personalized protection that will be there when you need it.

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Myth 3: You need life insurance only to cover funeral costs

The death benefit from your life insurance policy can help pay for your funeral expenses. But it can also pay for your family’s other expenses, such as:

  • mortgages,
  • personal loans,
  • tuition fees, or
  • donations.

You should ask yourself:

  • What are my current expenses for my family?
  • Would my family be able to cover these expenses in the event of my death?

With the right life insurance, you can leave them enough money to cover any expenses and repay any outstanding debts. It’s a small price to pay for a lot of peace of mind.

Myth 4: You need the same amount of life insurance coverage as your partner

Even if you have the same income as your partner, individual policies are almost always a better idea. Individual coverage can be customized to your respective needs. And a pair of personalized policies helps ensure both you and your partner have the right coverage. That way, you’re not paying a premium for more coverage than you truly need.

To better understand your life insurance options, talk to an advisor near you.

If you know what you need, get a free quote now.

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This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting, and tax situation.