Advice matters
Seven insurance myths debunked

When it comes to personal insurance cover, many people have different opinions on what the right sort of insurance to have is, and how much you might need.

But unfortunately, a lot of those perceptions and points of view may be driven by incorrect information. Here are seven common insurance myths,

Young people don’t need insurance

If you’re young, fit and healthy, you’ve probably heard that you don’t need to worry about insurance. After all, you’re bulletproof, right?

Unfortunately, problems can hit at any age, and insurance can be useful to help keep you on track, whether that means helping you pay the mortgage if you’re unable to work or looking after your family should something happen to you.

In fact, young people can be particularly in need of cover because they tend to have fewer assets to fall back on.

You only need insurance if you have lots of debt

A lot of people do have their first interactions with insurance when they take out a home loan. But it isn’t the only scenario in which cover can be necessary.

If you, or other people, are depending on your income, it’s always worth working out what steps you can take to protect that – and yourself more generally.

Insurance only helps if you die

Life insurance is a well-known type of insurance, but it isn’t the only sort that is available.

Personal insurance that pays out if you’re sick and unable to work, or cover to help pay for healthcare treatments, among other things, are also available.

There is a wide spectrum of insurance, from trauma and total and permanent disability policies through to health cover and policies that are designed to help pay your mortgage or rent if necessary.

It’s hard to claim on insurance

Most people hope that they never need to claim on the insurance policies that they have in place.

But it’s a misconception that it’s difficult to do so. In the June quarter of 2023, Financial Services Council data shows that there was more than $300 million in life insurance claims paid. Making a claim should usually be relatively straightforward – particularly if you have us as your insurance advisers to help you through the process.

Premiums become unmanageable as you get older

Some people are worried about being able to cover the cost of their cover as they get older and potentially riskier to the insurer.

There are ways to counteract this. As your advisers, we can talk through the options and help you work out how to align your cover with your budget and needs.

Only the main income-earner needs to be covered

It’s not true that you only need to worry about insuring the main breadwinner in a household.

In many families, there’s a division of household labour that means the unpaid work of the secondary or non-earner would need to be replaced if they were not there.

For example, if you’re a stay-at-home parent, would your partner have to hire a nanny or housekeeper if you were very ill or no longer around? In those situations, you may really benefit from having insurance cover.

Insurance is only for healthy people

Some people worry that if they’ve developed health conditions before taking out cover, they won’t be able to get insurance. Sometimes, pre-existing conditions will be excluded, or there will be a premium weighting applied for them.

But sometimes, there could just be a stand-down period applied, which means you have to wait for a period of time before cover is available for certain conditions. Depending on your policy, you may be able to have certain exclusions reviewed and potentially removed, or some exclusions may come off after three years of continuous cover if you don’t have any symptoms or treatments for the condition over that time.

We can help you work out what the situation is for your individual circumstances, and what options might be available and could be structured to suit your situation.

Time to find out more?

If you’d like to talk about your insurance needs, now or in the future, give us a call. We are insurance experts and can help you work through what you might need to protect you and your family. We’ll help you debunk the myths and get to the truth of what cover is the most appropriate fit for you.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.