The Real Facts Behind Common Life Insurance Misconceptions
Life insurance sounds complicated, expensive, or unnecessary. Maybe you think it’s something for older people or those with serious health problems. These misconceptions are more common than you might think, and they’re keeping many Canadians from protecting their families when it matters most.
It’s understandable why so many people put off getting life insurance. Nobody likes to think about their own death or consider what would happen to their loved ones financially. But here’s what might surprise you: life insurance for young, healthy Canadians can cost as little as a cup of coffee each day. Despite this reality, myths about life insurance persist, leaving families financially vulnerable.
The consequences of believing these myths can be serious. Most experts suggest having at least 10 times your annual salary in life insurance protection, yet many Canadians remain underinsured because of what they think they know about insurance.
Many Canadian employers do offer life insurance coverage, but these group policies usually provide limited benefits — typically just one or two times your salary. This highlights one of the most dangerous assumptions: that your workplace coverage is enough. Even during the first wave of COVID-19 in April 2020, related life insurance claims made up 13% of total claims, proving that coverage remains important even during unexpected health crises.
We’ll walk you through the eight most common misconceptions about life insurance in Canada and explain what these policies actually cover. You’ll also learn about non-medical options that offer simplified applications without extensive health examinations. Understanding the truth behind these myths will help you make informed decisions about protecting your family’s financial future and give you the peace of mind that comes with knowing your loved ones are looked after.
8 Common Misconceptions About Life Insurance
These myths stop people from getting the coverage they need. Let’s set the record straight on what’s true and what isn’t.
1. Life insurance is only for people with children
Do you have shared debts with a partner? What about a business that depends on you? Life insurance isn’t just about protecting children. If you have a spouse who helps pay the mortgage, elderly parents who depend on your support, or business partners who would struggle without you, coverage makes sense.
Even if you’re single, consider this: would you want your final expenses and debts to burden your family?
2. I’m too young to need life insurance
This might be the most expensive mistake you can make. The younger and healthier you are when you buy life insurance, the lower your premiums will be for the entire life of your policy. Waiting until you’re older means paying more, and what happens if you develop a health condition that makes coverage harder to get?
Getting coverage early locks in your future insurability and protects against the unexpected.
3. My work policy is enough
Most workplace life insurance only covers one or two times your annual salary. Is that really enough to replace your income and cover your family’s expenses? Nearly 39% of life insurance policies in Canada come through group term insurance, but these plans disappear when you change jobs.
What happens to your family’s protection if you lose your job or switch careers?
4. Life insurance is too expensive
How much do you spend on takeout coffee each week? A healthy 30-year-old can get term life insurance for about the same cost. Non-medical policies offer affordable options with simple applications that don’t require extensive health examinations.
If you think you can’t afford life insurance, you probably can’t afford to go without it.
5. Smokers or people with health issues can’t get coverage
Health problems might affect your premiums, but most Canadians with health concerns still qualify for coverage. Smokers can get policies too, though they’ll pay higher rates than non-smokers. Even people with diabetes or high blood pressure have options.
The key is working with brokers who understand different insurance companies’ underwriting guidelines.
6. Insurance only covers death
Optional Critical Illness Insurance provides a lump sum payout if you’re diagnosed with a covered condition, such as cancer, heart attack, or stroke. These funds can help cover medical expenses, lost income, or lifestyle adjustments while you recover.
Think of it as protection that works for you when you need it most — while you’re alive and facing a serious health challenge.
7. It’s hard to get life insurance in Canada
Getting life insurance in Canada can be straightforward. Non-medical policies don’t require extensive health examinations, and many providers offer online applications with quick approval processes.
The hardest part might be deciding which type of coverage fits your needs best.
8. I can’t get life insurance if I have risky habits
Insurers assess risk on a sliding scale — many people with higher-risk lifestyles can still obtain coverage, sometimes at slightly higher rates. Non-medical life insurance can be a great option for this.
Why These Myths Persist and What They Cost Families
These life insurance misconceptions don’t just disappear on their own. They spread through families, online communities, and outdated advice, creating real financial risks for Canadian families who believe them.
Old advice that no longer fits
Family financial wisdom gets passed down through generations, but insurance advice from decades ago doesn’t match today’s reality. Many Canadians still follow guidance that hasn’t kept pace with modern insurance options. This leads to coverage that no longer reflects current needs or replacement costs.
Your insurance needs aren’t the same as they were five years ago. Business growth, new assets, or family changes all affect how much coverage you need, yet many policies stay the same. Even insurance professionals acknowledge that all assumptions will “always be at least a little wrong, and sometimes quite wrong”.
Regular reviews become essential, especially after major life changes. What seemed adequate when you first bought your policy might leave your family struggling financially today.
Social media spreads dangerous misinformation
Social media platforms have become breeding grounds for insurance misinformation. During the pandemic, viral posts falsely claimed that COVID-19 vaccines would invalidate life insurance policies. These posts incorrectly referred to vaccination as an “experimental” procedure that would void coverage.
The Canadian Life and Health Insurance Association firmly stated that such claims had “no basis in fact whatsoever”. Insurance providers confirmed that “COVID-19 or any viral infection and its related vaccine” would not impact claims payments.
How easily misinformation spreads online can discourage Canadians from protecting themselves and their families.
The dangerous gap between assumption and reality
Nearly one-third of Canadian adults report living with a life insurance coverage gap. Only one in five Canadians feel very knowledgeable about life insurance.
The most persistent assumption? That employer-sponsored group insurance provides sufficient coverage. Since most group plans only pay one or two times salary, this coverage is “woefully inadequate” for most working Canadians. Over one-third of people overestimate the cost of life insurance by three times the actual amount, avoiding coverage they could likely afford.
These knowledge gaps hit hardest for those with lower incomes, where only 36% have access to life insurance through individual or group plans. The families who need protection most often have the least access to accurate information about their options.
Finding the Right Life Insurance Policy for You
How do you know which life insurance policy is right for your situation? The good news is that choosing coverage doesn’t have to be overwhelming, and you have more options than you might think.
When non-medical life insurance makes sense
If you have pre-existing health conditions, non-medical life insurance can be an excellent choice. These policies don’t require health examinations or blood work, making them ideal for Canadians who might struggle to qualify for traditional coverage. You might also consider this option if you work in a high-risk occupation or participate in activities like skydiving that make standard policies more expensive, or if you simply want coverage quickly and without hassle.
The application process is straightforward, and you can often get coverage quickly without the stress of medical appointments.
Why you need your own policy
Your workplace benefits might seem like enough, but they typically provide limited coverage that ends when you leave your job. Individual policies give you control over your coverage and stay with you regardless of employment changes. You can customise the amount based on your specific needs – whether that’s covering your mortgage, your children’s education costs, or ensuring your spouse has retirement funds.
Think about it this way: if you changed jobs tomorrow, would your family still be protected?
Reviewing your coverage regularly
Life insurance isn’t something you buy once and forget about. You should review your policy annually or whenever major life changes occur:
Health improvements (weight loss, better blood pressure numbers)
Career changes or salary increases
Changes to your beneficiaries
Major purchases like a home
New children or grandchildren
Regular reviews help ensure your coverage matches your current needs. You might discover you can reduce costs if your health has improved, or you may realise you need additional coverage as your family grows.
The key is making sure your policy works for your actual situation, not what someone else thinks you need.
Moving Past the Myths
Life insurance doesn’t have to be confusing or out of reach. The myths we’ve explored keep too many Canadians from getting the protection their families need. But now you know the truth behind these misconceptions.
You don’t need children to benefit from life insurance. You don’t need to be older or wait until you have health problems. Your workplace coverage likely isn’t enough. And the cost? Far less than most people assume.
The reality is that life insurance protects the people who matter most to you. Whether you’re caring for elderly parents, running a business, or sharing expenses with a partner, proper coverage ensures your financial obligations don’t become their burden.
Some policies do more than just provide a death benefit. Permanent life insurance can build cash value you can use while you’re alive. Non-medical options make coverage accessible even if you have health concerns or work in high-risk occupations.
Your insurance needs aren’t set in stone. Review your coverage when life changes – a new job, improved health, or different beneficiaries. What made sense five years ago might not fit your situation today.
The best insurance coverage is one that fits your individual needs. There are options for almost every situation and budget. The key is understanding what’s available and finding the right match for your circumstances.
At Maple Bay, we understand that life insurance decisions can feel overwhelming. We are insurance brokers, which means we aren’t here to push any particular insurance product. We have access to a range of policies from different providers, so we can help you find the coverage that makes sense for your family.
When you’re ready to protect your loved ones, contact the team at Maple Bay Insurance. Let us help you separate fact from fiction and find a policy that gives you peace of mind