5 myths about life insurance: What you need to know to help protect your family's financial needs

Life jackets, snow tires, smoke detectors: We spend good money on items that guard us against mishaps, but we rarely see their benefit demonstrated — and we probably don't want to. These safeguards all start with the basic understanding that our lives can take sudden, sharp turns without much notice. As we continue to hope for the best, it can be wise to plan for the worst. For many people, that includes purchasing life insurance.

"Having life insurance can help your loved ones with the financial impact, should you pass away. It means providing them financial security which can include, helping them pay off debts, pay living expenses, and medical or final expenses in the event of your death, "says Chinyere Ezemenari, Senior Manager with TD Insurance. Term life insurance can be simpler and more affordable than other types of life insurance. It comes in a variety of term options such as 10, 20 or 100 years and makes a payment to the beneficiaries of the policy on the death of the life insured.

If so many of us understand that life can be unpredictable, why do some Canadians still go unprotected? We sat down with Ezemenari to discuss some of the common misconceptions people have about life insurance, and how facts can help them move forward. Here's what she shared.

Myth #1: I don't need life insurance because I don't have kids

Although people often purchase their first life insurance policy after the birth of their first child, Ezemenari says you don't need to have kids for life insurance to be worthwhile. Other financial obligations, including co-signed student loans or mortgages, for example, are often reason enough. If you were to pass away with unpaid debts, consider who would be responsible for paying the remainder of what you owe: your spouse or partner, or even your aging parents? How would they cope?

Life insurance can also help if you want to leave a legacy, Ezemenari says. Making a charitable organization the beneficiary of your policy, for example, is one way you can continue to make an impact after you're gone.

Of course, if you do have children, life insurance is an easy way to help protect their financial wellbeing when you pass away and are no longer able to take care of them.

Myth #2: Life insurance is expensive, I'm not sure I can afford it

Ezemenari says the cost is one of the most common misconceptions people have when it comes to life insurance. While life insurance premiums can vary depending on your age, sex and the plan selected, for many people, the monthly fee can be affordable. Moreover, the premium will remain the same throughout each term in your insurance policy — often 10 or 20 years. "Of course, the younger you are, the lower your premiums will be," Ezemenari adds.

Ultimately, Ezemenari recommends considering the cost of a monthly insurance premium versus the cost of potentially leaving your family without financial support, should you pass unexpectedly.

Myth #3: I'm already covered by my employer, so I don't need life insurance

Ezemenari says there are several important differences between employer-provided life insurance plans and personal term life insurance.

For one, employer-provided insurance is generally tied directly to your overall compensation, which means the benefit paid out if you pass away may only be one or two times your salary. While Ezemenari says that may be enough to cover basic expenses for a period of time, for many it’s unlikely to allow for much beyond that. Further, she says employer-provided plans are usually not portable, which means that if you change jobs, you may not have an option to take that coverage with you. "With personal life insurance, you are the policy owner and it's not tied to an employer, " she says.

Myth #4: Life insurance seems complicated, and I don't want to take a medical exam

Although the thought of purchasing life insurance may conjure up images of excessive paperwork, an invasive medical exam, and meetings with lawyers, Ezemenari says the process can be simple and straightforward: "A medical exam isn't always required. In fact, with TD Insurance Term Life Plans, eligible applicants could receive instant approval with no medical exam required, depending on their age and coverage amount selected1".

For those with health challenges, it can be difficult for some to get life insurance. With no health questions or medical exam required, TD Guaranteed Acceptance Life Insurance can help provide financial support for your family. The benefit can be used to pay your final expenses, such as funeral costs, after you pass away. If you’re a Canadian resident aged 50 to 75, you will be instantly approved for coverage ranging from $5,000 to $25,000 — regardless of your current health or medical history.

Myth #5: If I never use life insurance, wouldn't it be a waste of money?

Life insurance can be an important financial safety net for families who understand that life can be unpredictable. As Ezemenari points out, it is there to help cover your family's financial needs if you were to pass away. So, the comfort that a life insurance policy can provide for you and your family may make it worthwhile. If you have any questions about term life insurance or guaranteed acceptance life insurance offered by TD Insurance or would like to get a quote, visit us online at TD Term Life Insurance or TD Guaranteed Acceptance Life Insurance.

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The content on this page is for general information purposes only and does not constitute legal, financial or insurance advice. Speak to a life licensed professional advisor regarding your specific situation. The information contained herein, is subject to change without notice.

TD Term Life Insurance and TD Guaranteed Acceptance Life Insurance are individual life insurance plans underwritten by TD Life Insurance Company. See Insurance Policy for coverage details, including limitations and exclusions.

1Eligible applicants aged 50 and under could be instantly approved for up to $1,000,000, depending on the responses provided to certain health and lifestyle questions on the application.