Seven big Life Insurance myths busted
Get the facts on some common misconceptions that can stop people from getting the cover they need.
Before we look at the big myths around Life Insurance, let’s look at one of the key truths. Tailored to you, Life Insurance can bring financial security and peace of mind into your life.
There are some common misconceptions that can stop people from getting the cover they need. Here, we expose seven of the biggest Life Insurance myths.
Myth 1: I’m single, so I don’t need Life Insurance
Fact: Even if you don’t have any dependants or a partner, there may still be debts to pay and funeral expenses to cover if you were to pass away. For example, the average basic cremation in Australia costs upwards of $4,000, with burials costing much more. If you don’t have many debts, nor a partner or children to think about, then your Life Insurance will cost you less.
Myth 2: My superannuation fund’s Life Insurance is enough
Fact: The Life Insurance provided by most superannuation funds is designed to cover only part of your Insurance needs. Research shows that super’s median default cover meets only about half of the basic needs for households with no children¹. The proportion is much lower for families with children – falling to less than 25% for families with just one child.
Myth 3: Life Insurance is expensive
Fact: Life Insurance can be surprisingly affordable. Policies vary, and will depend on your age and health. A non-smoker in their 30s can expect to pay less than $1 a day for comprehensive cover². It can be money well spent – Life Insurance is an investment in your future, which could help to safeguard you and your family.
Myth 4: Only breadwinners need Life Insurance
Fact: While it is important for the family’s main breadwinner to be insured, many families make the mistake of not taking out cover for their primary caregiver. Stay at home mums and dads provide an important role that, while unpaid, may need to be replaced in kind. The cost of childcare, cleaning, housekeeping and home maintenance duties can be considerable. Bear in mind too, that the family’s main earner may have to reduce their hours of work in order to help care for the children.
Myth 5: I won’t need Life Insurance until I am older
Fact: Many people make the mistake of delaying taking out cover until they are older. But Life Insurance premiums are calculated based on your age and health, which is assessed before your cover commences, so it makes good sense to apply while you are young and healthy. Did you know that many claims are made by people aged in their 40s³.
Myth 6: My health disqualifies me from Life Insurance
Fact: A medical diagnosis does not automatically mean you will no longer be eligible to apply for Life Insurance. Your cover can be individually tailored to suit your circumstances, which could include living with a chronic condition such as diabetes, high blood pressure or high cholesterol. Premiums may be slightly higher to reflect your increased risk levels, but if you are taking positive steps to manage your condition, you can keep any additional premiums to a minimum. Bear in mind that there are some medical conditions where we won’t be able to offer Death cover, but these are minimal.
Myth 7: I can file away my Life Insurance policy and forget about it
Fact: It is important that you keep your Life Insurance policy up to date and notify your insurer of any major life events, such as your marriage, birth of a new baby, increasing your mortgage or adopting a child. In these instances you can increase your Death cover without any further medical underwriting (subject to limitations). This facility can ensure that you aren’t underinsured as your life circumstances change.
To learn more about Life Insurance or to request a quote, call NobleOak on 1300 041 494.
Get the facts on seven myths around Life Insurance.