5 myths about life insurance
Whenever you talk about life insurance, opinions will always arise.
At Busy Bee, we’re all about making life insurance simple, so we have compiled some of the most common myths about life insurance and busted them. Don’t let myths stop you from getting the cover you and your loved ones deserve.
Myth 1: I pay for my policy but I won’t benefit from it
When you take out a term life insurance policy, it’s true that you won’t get the money, because for this policy to pay out, you have to pass away or be diagnosed with a terminal illness. However, this doesn’t mean you won’t benefit from your policy. Confused? Let us explain.
Many of the UK’s top life insurance providers equip you with free well-being benefits that can help you in all areas of your life.* These aren’t small benefits either. Think big.
Your policy can come with all sorts: 24/7 GP appointments, mental health support, second medical opinions, annual health checks - the list goes on. Plus, these benefits are also available to your partner and children.
Myth 2: Life insurance never pays out
It’s not uncommon for people to think you have to jump through hoops to get your life insurance policy paid out. But this myth is perpetuated due to stories of denied claims, giving life insurance a bad reputation.
However, the statistics tell a different story. In reality, the majority of life insurance claims are paid out. For instance, according to the Association of British Insurers (ABI), the number of new individual claims paid has remained consistent at around 98% since 2017. Aviva’s 2022 claim statistics show they paid out a total of £1.07 billion, settling 50,595 claims.
One of the main reasons any life insurance claim is denied is because of non-disclosure (not being truthful when taking out your policy). This is why it’s so important to fully disclose all relevant information when applying for a policy to ensure there are no reasons for a future claim to be denied.
Myth 3: I’m young, so I don’t need it
This is one of the biggest myths about life insurance. So many people are under the impression that you need to be married or a parent to need life insurance. However, this is not the case.
Being young and healthy is precisely why getting life insurance is a savvy move. At this stage, premiums are generally much cheaper, and sorting your policy at a younger age can provide peace of mind for longer.
Plus, once you take out a policy, your price is locked in. So, you’ll be paying the same rate throughout the whole of your policy term.
Myth 4: I have a policy through work, I don’t need a policy
When you start a job, you may be given a life insurance policy through your employer; this is called ‘death-in-service’.
While a death-in-service benefit can be a valuable perk, it may not be enough. These policies often only cover a few years' worth of salary and may not meet all your family’s needs, especially if you have a mortgage or other outstanding debts.
Additionally, if you change jobs, you might lose your policy. This is why having your own life insurance policy is crucial - this way you're covered no matter where your career takes you.
Myth 5: Life insurance is expensive
Guess what? It doesn’t have to be!
One of the most simple ways you can save some money on your life insurance is by using the help of a brokerage.
Many overestimate the cost of life insurance. The truth is, there are policies available for a range of budgets, and factors like age, health, lifestyle, and the amount of cover you choose will influence the cost. Plus, by working with a broker, you can compare prices and policy features from different insurers to find the most cost-effective solution for your needs.
Remember, the purpose of life insurance is to provide a safety net for you and your loved ones. Disregarding it based on myths could cost you down the line.
*Free benefits are not contractual and may be removed at any time