When it comes to financial planning for your future, life insurance should be a key part of the process. Having a life insurance policy suited to your individual needs can mean that your loved ones will have financial protection when you pass away, and secure in the knowledge that future expenses can be covered.
However, just as much as you are made aware of the benefits of life insurance, so do rumours and myths appear, especially across the web. With this in mind, we are going to debunk the top three most common myths, so that you’ll have a better understanding of life insurance.
Myth #1 – Insurance companies don’t pay out
You may have come across the suggestion that insurance companies avoid paying out the death benefit (the amount of money paid from a life insurance policy) to your loved ones, in the event of your death. But the truth is, this just is not the case. If a valid claim has been made, then a pay-out from the provider will be processed.
However, there are some steps that you can put in place and criteria to be met, to make the process smoother for your beneficiaries when you are no longer with them, including:
- Making sure to answer all the questions required fully, truthfully and accurately when applying for life insurance. In some case, this can also involve a medical exam. If you disclose all the important details to your insurance provider, then you can be certain that no personal factors can crop up and affect a future claim.
- Telling your family, friends or anybody that will be entitled to the death benefit, about your life insurance policy. This can go as far as letting them know the company you’re with, the policy number and the term (time period) of the policy. In the circumstances of your death, this will make it easier for them to make a claim.
- Ensure that you have consistently paid your premiums and that your cover applies to the term that you require.
Myth #2 – You don’t need life insurance if you’re young, fit and healthy
When it comes to life insurance, there is no better time to think about your future than the present. You’ll need to be over 18 years old to apply for a policy, but other than that, your age shouldn’t deter you from getting life insurance.
Life is also unpredictable, and although it can be daunting to think about, you never know when an unexpected diagnosis may happen or a serious accident, even if you are currently fit and healthy. In fact, that works in your favour when it comes to cover, as it is more likely that you can get cheaper premiums for your life insurance because of these reasons.
It also means that you have a plan in place for when you hit other milestones in your life, such as getting married or having children, and can be rest assured that can be financially covered in the worst-case scenario.
Myth #3 – Life insurance is too expensive
There are so many different life insurance options nowadays, that you are likely to find something to suit your budget and cater to your personal circumstances. In most cases, you can also opt to pay a monthly or annual premium.
If you believe paying towards life insurance is an expense you don’t need, then maybe you should consider the outcome of not having life insurance and the financial protection you won’t have for your loved ones, compared to the guaranteed support they would have from receiving a life insurance pay out.
When looking into a life insurance policy, however, cheap doesn’t always mean the best, and instead you should look for value for money, or the insurance company who can provide you with a protection policy that suits your circumstances.
There are plenty of online resources out there, such as The Insurance Bulletin, that do the hard work for you and bring together the top life insurance companies that tick the boxes when it comes to financial ratings, range of life insurance options, and premiums that fit into your budget.