What Hollywood Gets Wrong (and Right) About Life Insurance

Life insurance on the silver screen? Why not? Movies through the ages, from comedies to gritty dramas and action thrillers, have found plot inspiration in life insurance policies. 

The problem is, as with anything Hollywood, it can get tricky separating fact from fiction. Here’s how some of our favorite life insurance movies compare to the real deal.

Along Came Polly

Is true love worth the risk? That’s what this rom-com attempts to answer by following the story of Reuben Feffer (Ben Stiller), a neurotic risk assessor for a life insurance agency, and Polly Prince (Jennifer Aniston), the carefree, fun-loving gal who shows him how much life he’s missing. Reuben gradually learns to overcome his fear of such activities as salsa dancing or walking on subway grates and embraces a more adventurous new future.

What the movie gets right: Professionals like actuaries and underwriters really do rely on sophisticated algorithms to assess risk. When you apply for a life insurance policy, factors like your age, gender, health (including mental health), weight and lifestyle are all part of the equation to check how risky you are to insure and what premium rates to offer.

What the movie gets wrong: Underwriters don’t expect you (or themselves) to avoid living a normal life in hopes of avoiding miniscule risks. You can get coverage without being in pristine health or giving up every activity that could leave you with a bump or a scrape. It’s true that some risky actions can affect your life insurance (think, DUIs), but you don’t need to worry that taking dance classes is a stain on your record.

Double Indemnity

This Oscar-nominated film noir classic is an enduring gift to cinema, but a bit of a headache for professionals in the insurance world. Double Indemnity has it all—men in fedoras, a femme fatale, Transatlantic accents, crime and passion. In this case, the lovers conspire to kill the husband and use the double indemnity clause to get a big (fraudulent) payout.

What Hollywood gets right: It is true that accidental death and disability (AD&D) insurance exists, both as a separate policy or a rider on some term life policies. If we’re feeling exceptionally generous, we can also say the movie is broadly correct in showing that crimes like insurance fraud and murder don’t pay. 

What Hollywood gets wrong: Do we even need to say it? Insurance fraud (not to mention the various other crimes in the film) can land you in serious legal trouble. Most states have a fraud bureau to investigate suspected fraud, and national agencies like the National Insurance Crime Bureau and National Association of Insurance Commissioners report fraud as well. In short, you’ll find yourself better off by doing what you can to prevent your life from looking like film noir, starting with being honest in your life insurance dealings.

Alias Jesse James

In this 1959 comedy Western, Bob Hope plays Milford Farnsworth, a bumbling insurance salesman who sells a $100,000 policy to a man he discovers later was infamous outlaw Jesse James. Milford’s boss sends him back out to buy the policy back, and gun-slinging, bank-robbing shenanigans ensue.

What Hollywood got right: For a notorious outlaw, Jesse James takes a surprisingly responsible step in recognizing his need for ample life insurance coverage. His $100,000 policy in 1866 is equivalent to about $1.8 million now. If he was hoping to leave a death benefit to support his band of fellow outlaws, he was certainly ready to cover his share. The movie also gets it right that insurance companies assess lifestyle risks, and bank-robbing bandits wouldn’t be offered coverage.

What Hollywood got wrong: Milford’s meant to be an inept insurance agent, but even he should know he needs to get details like identity straight before handing out a policy. Real underwriters would never have approved Jesse James’ policy without his actual information, including medical info and, you know, his real name. And if Jesse James (or anyone else) misrepresented that information, the agent doesn’t have to track them down to “buy back” the policy. The company can deny the claim if insurance fraud or deliberate misrepresentation is involved.

Term Life

Term Life is a thriller starring Vince Vaughn as a heist coordinator trying to keep his estranged daughter out of the clutches of the criminals who are after him. With a Rotten Tomatoes score of 0 percent, it’s safe to say this is no Double Indemnity, but it’s got car chases and some bright spots of father-daughter bonding.

What the movie gets right: Vaughn’s character, Nick Barrow, is trying to do right by his 16-year-old daughter. That means not only protecting her from current threats but being mindful of her future with a life insurance policy.

What the movie gets wrong: Nick names his daughter as both primary and contingent beneficiary, which is wrong for a few reasons. First, naming a child under 18 as beneficiary gets complicated because minors can’t access the funds directly until they come of age. The court would have to establish a trust and appoint a guardian, meaning extra time, cost and hassle before matters are in place for someone to handle the funds. Second, a contingent beneficiary only gets a life insurance payout if all primary beneficiaries have passed away, so it doesn’t make sense for the same person to be listed as a primary and contingent beneficiary.

About Schmidt

Jack Nicholson plays Warren R. Schmidt, a recently retired insurance agent in major need of a life refresh. After decades in the same humdrum routine, Schmidt embarks on a cross-country RV trip to be involved in his estranged daughter’s wedding preparations. New people and new experiences help Schmidt rediscover that “life is short and [he] can’t afford to waste another minute of it.”

What the movie gets right: Life is full of unexpected new chapters and possibilities (a wedding! A road trip! New family ties!). Reaching your senior years can bring fresh adventures—and a renewed interest in life insurance to cover what’s important to you.

What the movie gets wrong: Schmidt is a lovable curmudgeon, but (in our humble opinion) it’s strange that a life insurance worker would need such a big change to see the beauty in life. Life insurance policies are meant to help protect loved ones, like Schmidt’s wife and daughter, so there’s a built-in reminder of what’s truly important in life. Still, it’s heartwarming to see him find his way to cherishing what he’s had all along.