Protection Tomorrow

Life Insurance Myths Can Lead to Protection Gaps

WASHINGTON (Sept. 12, 2019)— Life insurance has long been a cornerstone of financial security, but the gap between perception and reality is dramatic. According to the 2018 Insurance Barometer Study from the Life Insurance Marketing and Research Association (LIMRA), almost everyone (90%) thinks a family's primary wage earner needs life insurance. And yet, one in five people who have life insurance say they do not have enough, and 20% of millennials say they wish their spouse/partner would buy more life insurance. The 2017 edition of the study reported that 71% say they need life insurance but only 59% have coverage. 

As part of Life Insurance Awareness Month, the National Association of Insurance Commissioners (NAIC) is holding a Twitter chat to correct misconceptions about life insurance on September 17, 2019 at 3 PM ET, for people to ask questions of experts. 

Among the more commonly held myths that prevent people from buying life insurance: 

  1. Life insurance is too costly. Participants in the study estimated the cost of a $250,000, 20-year level term life insurance policy for a healthy 30-year-old to be more than three times its actual cost. 44% of millennials overestimate the cost of life insurance by five times the actual amount. 
  2. I don't need life insurance right now. Four in 10 households without life insurance would have immediate trouble paying living expenses if their primary wage earner died. Waiting to purchase life insurance until it's actually needed can create barriers to eligibility or drive up cost. 
  3. Life insurance is just a death benefit. There is more to life insurance than death benefits. When choosing a policy, it's important to consult a licensed investment or tax advisor to find the right fit with your risk tolerance and investment objectives.

More life insurance details are available on the NAIC's consumer education site.

About the NAIC

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. For more information, visit

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