For a single person of modest means, employer-paid or provided term coverage may be enough. Keep in mind however that the policy is owned by the company and if you ever leave the company or get terminated you lose the insurance as well. If you have a spouse and/or other dependents, or know that you will need coverage upon your death to pay estate taxes, then additional coverage may be necessary if the term policy does not meet your benefit needs.
Myth #2: I'm Single and Don't Have Children, so I Don't Need Coverage
Even single people need at least enough life insurance to cover the costs of personal debts, medical and funeral bills. If you are uninsured, you may leave a legacy of unpaid expenses for your family or executor to deal with. You may have had to deal with that burden yourself due to a deceased parent or know someone who has. Instead leave a legacy to a favorite charity or other important cause if you don't currently have any beneficiaries.
Myth #3: My Life Insurance Coverage Needs to be Based on my Annual Salary
The amount of life insurance each person needs depends on each person's specific situation. There are many factors to consider. In addition to medical and funeral bills, you may need to pay off debts such as your mortgage and provide for your family for several years including college tuition for your children. A cash flow analysis is necessary in order to determine the true amount of insurance that must be purchased - the days of computing life coverage based only on one's income-earning ability are long gone.
Myth #4: I Should ALWAYS Buy Term and Invest the Difference
There are distinct differences between Term and Permanent Whole Life and the cost of Term Life coverage can become extremely high in later years. Those who know for certain that they must be covered at death should consider permanent coverage. The total premium for a more expensive permanent policy may be less than the ongoing premiums that could last for years longer with a less expensive term policy.
Myth #5: It's Better to Invest all my Money than to Buy Life Insurance
Until you reach the breakeven point of asset accumulation, you need life insurance coverage of some sort. Once you amass $1 million of liquid assets, you can consider whether to discontinue (or at least reduce) your $1 million policy. You take a big chance when you depend solely on your investments in the early years of your life, especially if you have dependents. If you die without coverage for them, there will be no other means after the depletion of your current assets.