7 Life Insurance Myths
There are many myths about life insurance. A lot of them are simply misconceptions about who life insurance is for and when you should get it. In this list, we wanted to clear many of them up to leave you much better informed about life insurance.
7 Common Misconceptions About Life Insurance Policies
1. It’s only for those with a mortgage
A big life insurance myth is that life insurance is only for those with a mortgage. There is no doubt that a mortgage is a big reason to get insurance, as being mortgage-free after someone has passed away can be a huge financial relief.
That being said, there are plenty of other reasons to get life insurance. Being able to leave a lump-sum can ensure financial stability, give financial support for a child’s guardian or even set up a trust for your children’s future. Life insurance policies without a mortgage attachment can also be very affordable.
2. I’ll need to complete a medical/I can’t get life insurance
There is plenty of misunderstandings when it comes to life insurance at health. Many people think that a medical is a definite requirement. In truth, medicals for life insurance are very rare and are usually only required if you have a serious health issue or past health concerns.
If you do have a health condition or are a smoker, for example, then there is also a misconception that you won't be able to get any life insurance at all. In reality, while there is a distinct possibility you will have higher premiums than someone with no health issues, you will be able to get life insurance.
3. I don’t need life insurance if I’m not the highest earner
Let’s look at an example of a household with two adults and three children. One adult works in full-time employment while the other looks after the children. Many people feel that it’s sensible for the person in full-time employment to get life insurance, which is true. Without their income, the family couldn’t cope. Where they would be wrong is thinking that it’s only the earner who needs life insurance.
If the parent who looks after the kids passes away then who looks after the children? It would cause huge upheaval and the possibility of the earner needing to leave employment due to childcare needs. Every family dynamic is different but it makes sense for both adults to get life insurance.
4. It’s not something for young people
You see life insurance adverts all the time directed to older people. In reality, it's a good idea for any adult to look into life insurance. Anything can happen in life and you want your loved ones to be financially protected after you've gone, regardless of what age you are.
There is a financial incentive for younger people too. As they are further away from the life expectancy age and usually healthier, their premiums are usually much cheaper. You're able to have that peace of mind at a low cost.
5. Insurers will find a way not to pay out
There's also a line of thinking that insurance companies will find any way they can not pay out. The terms and conditions of a life insurance policy will always be laid out in black and white. If you are completely honest when signing up to a policy, then you’ll have nothing to worry about.
There can be issues when someone hasn't declared health problems, such as diabetes, on their application. Some people do this to try and get a cheaper premium but it can invalidate your policy. If you have been open and honest with your insurer then they'll happily pay out on any policy.
6. It’s an unnecessary expense
It's tempting to think that the money paid to a life insurance policy could be spent elsewhere. As with all types of insurance, you're protecting yourself from something that you hope will never happen. Death, however, unfortunately comes to us all.
Life insurance isn’t for everyone but for the majority of people, it can give them a comfort blanket. Many people also think that it’s more expensive than it is. You have flexible term life insurance plans which are highly affordable while still giving you a high level of cover.
7. Life insurance is a mortgage requirement
There is no legal requirement to get life insurance when you get a mortgage. A mortgage provider will often ask you to get it or recommend a provider but there is no law for this. You can choose not to have life insurance or use your own provider.
While it’s not a legal requirement, both life and buildings insurance may be a prerequisite before a lender accepts your mortgage application due to their own policy. Even though not required by law, it’s usually a very good idea to get life insurance if you have a mortgage.
Find out for yourself
Have any doubts about life insurance? If so, it’s best to ask an insurer directly rather than presuming the worst. People are often pleasantly surprised at the low cost of premiums and how easy life insurance can be.
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