Life insurance is one of the most misunderstood financial products. In the 2025 Insurance Barometer Study, only 51% of Americans ages 18 to 75 said they own any life insurance, and 40% said they need coverage or need more of it. Here are five mistakes I see most often when I meet with families in Southern California.
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1. “It’s too expensive”
Young adults overestimate the cost of a basic term policy by about 10 to 12 times, according to the 2025 Barometer. For many healthy adults, a basic term policy costs much less than they expect. The only way to know your price is to get a quote.
2. “I have coverage at work, so I’m covered”
Group coverage is a great benefit, but it is usually only one to three times your salary, and it typically ends when you leave the job, according to Life Happens. Employers are also not required to offer it. A policy you own stays with you.
3. “Only the breadwinner needs it”
A stay-at-home parent provides childcare, transportation, cooking, and household management. Replacing that work costs real money. Both parents should consider coverage.
4. “I’m young and healthy, so I don’t need it yet”
Being young and healthy is exactly when coverage is cheapest and easiest to qualify for. Your health can change, and once it does, coverage may cost more or be harder to get.
5. “Once I buy it, I’m done”
Life insurance passes to the beneficiary named on the policy, not to whoever is named in your will, as the California Attorney General explains. After a marriage, divorce, new baby, or death in the family, an outdated beneficiary can send money to the wrong person. Review your beneficiaries every few years and after big life events.
Bonus: policies get lost
Families sometimes don’t know a loved one had a policy. If you think a deceased family member had life insurance or an annuity, you can submit a free search request through the NAIC Life Insurance Policy Locator.
Related reading: 3 Things People Don’t Know About Term Life Insurance and 3 Reasons People Don’t Get Life Insurance (and Why They Should).
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Frequently Asked Questions
What percentage of Americans have life insurance?
According to the 2025 Insurance Barometer Study from LIMRA and Life Happens, 51% of Americans ages 18 to 75 own life insurance.
Does my will control who gets my life insurance?
Usually not. Life insurance generally pays the beneficiary named on the policy, which is why beneficiary designations should match your estate plan.
Should a stay-at-home parent have life insurance?
Many families decide yes, because replacing childcare and household work would cost money if that parent passed away.
How do I find out if a deceased relative had life insurance?
You can submit a free request through the NAIC Life Insurance Policy Locator, and participating insurers will check their records.
Last updated October 2026. This article is general education, not tax, legal, or investment advice. Brent Hernandez, California Life Insurance License #0M15424. Insurance products are offered through Hegemon Insurance Solutions (California License #0I0198). Features, costs, and guarantees vary by carrier and policy, and guarantees depend on the claims-paying ability of the issuing insurer. Wet Ink Notary LLC is not a law firm and does not give legal or tax advice.