Life insurance may not be something you think about very often and when you do, it might seem confusing. This is something that is not helped by the common misconceptions about life insurance cover, which can often put people off buying cover.
If you are not sure what is fact or fiction when it comes to life insurance, Caspian Insurance offer some guidance to clear up some of the most widespread myths about life insurance.
Myth 1: I have to undergo medical checks to get life insurance
Many people think they will need to undergo medical checks and examinations in order to be accepted for life insurance. This can be incredibly off-putting for many who do not wish to go through such a process.
When applying for life insurance, you do have to answer some basic health and lifestyle questions. This provides the insurer with a picture of your health background and lifestyle, so they can determine how much of a risk you pose. If you are in good health with no complications it is unlikely that you will need to undergo further medical checks.
In some cases, if the insurer wishes to understand more about your health or you have suffered from previous conditions, you may be asked for further information or the insurer may wish to contact your GP. This is decided on a case-by-case basis and is dependent on your circumstances.
Myth 2: I do not need life insurance because I have no children
Having children may have an impact on your decision to take out life insurance, but life insurance can protect so much more than your children. Life insurance can cover a multitude of financial responsibilities, including your mortgage repayments or rent so your family does not have that burden, or even contributions towards your funeral.
Even if you do not have children, you may have a partner who would benefit from the financial support that comes from a life insurance policy.
Myth 3: I am healthy so I do not need life insurance
Unfortunately, no one knows what is around the corner. Even if you are a picture of health, sometimes unforeseen circumstances can turn everything upside down. Accidents can happen and the worst could occur unexpectedly, no matter your age or health condition.
It is important to pre-empt these unfortunate circumstances and protect you and your family, should anything happen. There is also the consideration that life insurance is more affordable when you are young and in good health. As you get older, your risk of health problems is bigger, which may impact the cost of your premiums.
Myth 4: I am not the highest earner in the house so I do not need cover
Whether you are the breadwinner of the family or not, your passing could still have a devastating financial impact on your household. For instance, if you are a stay-at-home parent and you passed away, your partner may benefit from the cash sum in order to cover childcare.
If you are working, but earn less than your partner, it is still important to consider life insurance. Depending on your circumstances, your family would still experience a loss of income and may struggle with bills or everyday living costs.
Myth 5: Life insurance is expensive and does not pay out anyway
Many people assume that life insurance is a complicated process and that receiving a pay-out is rare. In fact, ABI figures from 2018 showed that 97.6% of claims were paid*. Providing you gave accurate information when applying for life insurance and you have a valid claim, it is more than likely that you will receive a pay-out.
The cost of life insurance is dependent on your circumstances.