Five Common Myths About Life InsuranceEven as the number of individual life insurers has shrunk, the value of policies issued by the American insurance industry has continued to grow. These policies have become more complex, contributing to the development of a confusing and often conflicting insurance landscape. As a result, many potential policyholders mistakenly conclude that there's no reason for them to carry life insurance. If you're on the fence thanks to one of these five common myths about life insurance, read on and reconsider.

1. Life Insurance Is Too Costly

While it's true that the "sticker prices" for many life insurance policies can be high, there tends to be a clear correlation between the price of a given policy and the value that it delivers. Whole or permanent life insurance policies with high face values carry higher premiums because they are designed to accrue added value over the course of their policyholders' lifetimes. When they mature, they deliver a death benefit or redemption value that provides beneficiaries with lasting financial protection.

By contrast, monthly premiums for simple term-life policies that remain in force for 10 to 30 years may cost less than a single casual-dining meal. Although it may expire without ever delivering benefits, an affordable term life insurance policy provides peace of mind at a fraction of the cost of auto insurance.

2. Life Insurance Won't Cover Certain Individuals

If you smoke, suffer from a certain pre-existing medical condition, or plan to retire within the next few years, you will have to pay more for life insurance. However, insurance companies are less likely than you might think to completely refuse your application for coverage. Since the 1990s, the average American's lifespan has increased, reducing the inflation-adjusted cost of term life insurance coverage by a factor of two. Thanks to smarter actuarial algorithms and sounder investment strategies, the country's life insurers have brought affordable life insurance to the masses.

3. Young, Healthy People Don't Need Life Insurance

If you're young and fit, you may not see much benefit to taking out a life insurance policy that you may never need. While this line of reasoning may make intuitive sense, it's flawed for two main reasons.

First, term life insurance is especially affordable for individuals under age 40. You may not even have to take a medical exam to secure a multi-year policy with a death benefit of $100,000 or more. Depending upon the state of your health, the size of your policy, and the whims of your insurer, your monthly premiums may be as low as $30.

If you're in the market for whole life insurance, you'll save a great deal on your premiums and add tens of thousands of dollars to the final cash value of your policy by getting an early start. Permanent life insurance offers many advantages, including tax-deferred benefits, that may become increasingly attractive as retirement approaches.

4. Life Insurance Is Easy to Neglect

Since most forms of life insurance provide coverage for decades, you may worry that you'll forget about your policy for years at a time. In fact, you may not see the benefit to paying much attention to a product that seems static. This is a mistake: By paying careful attention to your policy and making updates to your file as necessary, you may be able to reduce the long-run cost of your coverage.

5. One Policy Per Household Is Sufficient

If your spouse already has a solid life insurance policy in their name, you may wonder what good it could do to have a redundant policy of your own.

For one, your marriage could end in divorce or the death of your spouse. In the former instance, you'll need a policy of your own to avoid burdening your children or relatives when you die. In the latter, you'll need coverage that outlasts the rapidly-dwindling death benefits from your spouse's policy.

If you work outside the home, you must also worry about replacing your own income in the event that you die before your spouse. Even if your spouse has a full-time job, he or she will need the extra support to help pay for childcare and other household expenses.

This article was composed by Roy McClure for the team at Insurance Swami; click here to learn more about them.