Of all insurance products, life insurance tops the charts in terms of importance. Life insurance can help your family members maintain their financial well-being if you pass away. Put otherwise, this policy is all about securing the future for the people you love.
If you are new to the idea of life insurance, it’s easy to get confused, especially with the many misconceptions out there. A lot of people have skipped getting this coverage because they don’t have the facts.
In this post, we break down six common life insurance myths and why you shouldn’t pay attention to them. Read on to learn more.
Myth #1: Life Insurance Is Expensive
Nearly 60% of UK adults don’t have any form of life insurance policy. When asked why this is the case, over half of them say that this coverage comes with a hefty price tag.
The truth is life insurance policies don’t cost as much as you may think. If you compare prices across top insurance providers on platforms such as Caspian Insurance, you’ll realise that the average rate is about 2% of your annual salary.
And because insurance is about risk, annual premiums are going to be relatively low for younger people. It’s important to speak to a trusted agent to get accurate life insurance costs that meet your needs and budget.
Myth #2: Life Insurance Is Only for People With Children or Dependents
There is a fixed notion that young people don’t need life insurance as they don’t have people who depend on them. In reality, life insurance is not just for breadwinners.
For example, if you buy life insurance while still single, you can pass some of the death benefits to your niece, nephew, or someone else who doesn’t necessarily depend on you financially.
Also, those that you leave behind can use the single life policy death benefit to offset:
- Funeral costs
- Mortgage debts
- Credit card debts
- Private student loans, etc.
Your death benefit can also come in handy if your family has a history of chronic health conditions. Your family can use the money to counteract future health issues.
Myth #3: Employer-Sponsored Life Insurance is Sufficient
Some companies provide their employees with group life insurance or relevant policies. In most cases, employer-sponsored life insurance has a coverage amount worth 1-2 times your annual salary.
Now ask yourself, would that amount be enough to support your loved ones after you’re gone? Also, what if you decide to switch jobs, or worse, get laid off? In both cases, your employer-sponsored life insurance ceases to exist.
For these reasons, it’s wise to take out individual life insurance that covers you regardless of where you work. A good place to start is Whole of Life or Term Life policies.
Myth #4: Life Insurance Is Out of Reach for People with Health Issues
There is a common misconception that people with pre-existing conditions aren’t insurable. Just because you have a health condition, doesn’t mean you can’t get affordable life insurance quotes.
In fact, many insurance companies have designed policies that cater to certain illnesses or physical conditions, such as diabetes, cancer, weight problems, and more.
Generally speaking, your insurability depends on how well your condition is monitored and controlled. That means those whose health conditions are managed and stable have high chances of securing an affordable life insurance policy.
Myth #5: Life Insurance Policy Holders Require Annual Health Check-Ups
As part of the life insurance purchase process, many insurance providers will require that you undergo a comprehensive insurance medical exam. This may cover your complete blood count, liver function test, kidney function test, routine urine test, HIV test, and more.
The purpose of this medical exam is to determine whether you have a health condition. This will help the insurance provider to create the best plan that suits your health conditions, if any.
However, some people think that regular health check-ups will be necessary after the policy starts. The reality is that once you have your life insurance policy in place, the insurance provider will not ask you to provide further annual health check-ups.
Myth 6: Life Insurance Cannot Be Customised
A lot of people tend to think that life insurance policies are all the same and cannot be customised. That’s just a myth and there is no truth to it.
In this time and age, competition is all the rage and nothing can remain the same for a long time. This also applies to life insurance policies.
Contrary to popular belief, life insurance plans can be customised to match your needs. For example, you can decide to add optional riders, critical illnesses, and accidental deaths to your policy to get more benefit.
Which other life insurance myths have you heard? Please share with us so we can empower our readers to distinguish facts from rumours.
