Top 5 life insurance myths debunked
Life insurance is a crucial element of financial planning, yet it's often surrounded by myths and misconceptions. However, if you truly want to safeguard your future and that of your loved ones, it’s important to uncover the genuine facts of life insurance, and understand why it should be an integral part of your financial planning. Here are some of the common myths:
Myth 1: Life insurance is only about death.
Fact: While life insurance does provide crucial financial support in the event of a policyholder's passing, its scope extends far beyond this common misconception. Life insurance can be a versatile tool to safeguard your family's financial future.
A reliable family life insurance plan can help your family avoid financial stress if you pass away as it can cover medical bills, and make sure your loved ones can keep their home without worrying about future mortgage payments. Most importantly, if you’re the primary breadwinner of the family, life insurance can serve as income replacement, offering essential financial support to your family, and helping them maintain their quality of life.
Myth 2: I’m still young, I can always buy life insurance later.
Fact: Your youth may give you a sense of invincibility, because you’re still young and healthy right now. However, delaying the purchase of life insurance isn’t a wise decision because the cost of life insurance goes up as you get older and you’ll likely end up paying far more in the long run. Additionally, if you do develop health conditions, it could become more challenging for you to get the same level of coverage (even at higher premiums!), as even minor health issues could impact your insurability.
Myth 3: I can't get life insurance with pre-existing conditions.
Fact: Although it may be more difficult to get life insurance with pre-existing conditions, it’s still possible. There are insurance plans that can be tailored to the needs of people with pre-existing conditions but it may have an impact on the premium. Any additional premiums may vary depending on the severity of your condition. However, if you have a pre-existing condition, it's important to be honest and transparent when applying for life insurance. This will help you get the best possible coverage and avoid legal issues should there be a need to make a claim later on. For more insights on what kind of life insurance plans are available for individuals with pre-existing conditions, it’s best to make an appointment with a trusted insurance agent to get a better understanding.
Myth 4: I have no dependents, so I don't need life insurance.
Fact: Life insurance may not be a necessity if you have no dependents, but it can still be beneficial in other ways. For example, life insurance can help cover funeral expenses, debts, and other financial obligations so that your loved ones are not burdened by these financial obligations.. Additionally, life insurance allows you to leave a financial legacy to charitable organisations of your choosing.
Myth 5: I have savings and investments, so I probably don't need life insurance.
Fact: Making smart investments is a great way to pad out your savings account. However, it still may not be a wise idea to entirely depend on them to support your loved ones in the event of your passing. Even a sizable savings account can be quickly drained due to major life changes such as a medical condition or a fire that results in a loss of home. Relying solely on your investments may also not be a great idea as there is no guarantee that your investments would be enough to sustain your family’s lifestyle in the long run, especially if you have young children. Plus, your investments might not have had the necessary time to mature, and having your family cash them out ahead of time due to emergency situations could result in a financial loss instead.
It’s important to note that having a backup plan in the event of an unfortunate incident is always better. Now that we’ve cleared up some misconceptions about life insurance, why not get in touch with our professional agents at Great Eastern for an insurance policy that suits your needs? If you’re keen on doing the calculations yourself beforehand, or simply curious to know how much coverage is necessary to sufficiently provide for your dependents, you can also check out our handy dependent protection and liability calculator to get a better idea of the amount you’ll need.
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