3 Common Misconceptions Related To Life Insurance
If you’re sat deliberating about whether or not to take out a life insurance policy, the first thing we’d say is to speak to an experienced life insurance advisor. Able to offer you the best advice possible on not only why you should take out life insurance, but also which type of cover is going to be best for you, receiving life insurance advice from a professional, independent advisor will ensure you get answers to any questions you may have.
However, we know that speaking to a life insurance advisor, rightly or wrongly, often follows a bit of research online. It’s like talking to a company about car insurance – you know they’ll have the answers, but you want to do your own research before you speak to them and take out a policy.
A lot of the time, this is to clear up any questions you may have and increase your knowledge about certain preconceptions first. Therefore, looking at some of the more common misconceptions related to life insurance, the following information should help to alleviate any concerns you may currently have.
1. You should only take it out when you’re young
We’re always told to take out life insurance as early as we possibly can. And there are various benefits to doing so, most notably that the younger we are, the cheaper the premiums (largely because insurers have a longer period over which to recoup money for any potential payout).
When we get older, we can often believe that life insurance is either not a necessity or it’s going to be too expensive.
Whilst there’s no doubt life insurance does increase with age, it’s very rarely unaffordable and this is where an experienced life insurance advisor will really come into play, as they’ll find you the cheapest deal possible for your circumstances.
In terms of life insurance not being a necessity when you get older, that’s almost completely false.
A lot of people think this way because they’ve got a fair amount of money saved up and don’t believe they need to pay out x amount of money on a monthly basis for life insurance to pay their debts when they die, as their savings would cover it.
Although great in one sense, what about your children’s inheritance? By not taking out a life insurance policy, you are reducing the amount of inheritance they’ll receive, potentially considerably so – and it’s this inheritance that could help to secure their future.
2. If you’ve been a smoker, your premiums are always going to be high
Firstly, it’s important to understand that if you smoke, your premiums are going to be higher than someone who doesn’t. As life insurance is based on probability and non-smokers, on average, live longer than smokers, insurers have to compensate for the lower life expectancy of the latter.
But saying that, just because you’ve been a smoker once, it doesn’t mean your premiums are always going to be high. In fact, if you stop smoking for just 12 months – not 10 years like so many believe – most insurers would class you as a non-smoker, which would bring the cost of your premiums down hugely. Just remember not to start again once you’ve got your policy!
3. You always need a medical
No matter what you’ve been told in the past, the simple fact is most life insurance policies won’t require you to take a medical. There are always exceptions, but for the majority of the population, you’ll be able to take out a life insurance policy without any type of medical examination – the most the insurer is likely to ask for is a letter from your GP.
This is even true when you actually need to make a claim. Once you pass away, as there’s no probate period like there is with a will, your money will almost always be paid out instantly. Again, there are a few exceptions where medical records may need to be examined to ensure the policy is valid (for instance, if you said you weren’t a smoker but you died of a smoke related illness, chances are your policy would be void), but more often than not, your family will be able to receive the amount of your life insurance sum immediately upon your death.
These three points are all common misconceptions about life insurance, but there are so many more out there – and it’s for this reason why speaking to a life insurance advisor is always strongly recommended, as apart from anything else, they’ll be able to ensure any misconceptions you have are put right instantly.