You are correct! Singers wear earpieces so they can choose what they hear. If they want to hear the lyrics, they can. If they want to hear themselves sing, they can. Earpieces help drown out the background noises, such as the instruments from the band or even the crowd. These noises can be distracting for the singers.
With earpieces in, the singer reduces background noises to an average of 30 decibels. This is extremely helpful for the singer.
These earpieces are custom made to fit the singer perfectly and also are made in different colors and styles so the singer can choose one to fit his or her outfit on stage.