6 life insurance myths busted for 2023
Before you look for a life insurance policy, you need to have all the facts at hand.
Sponsored by Zurich. Ezicover Life Insurance policies are complimentary for the first 30 days. In the first year of your policy, you'll only pay 11 months' premium. Terms and conditions apply.
There are plenty of myths and misconceptions that do the rounds about life insurance.
But if you're considering whether life insurance is right for your needs, it's important to make sure that you're weighing up the facts.
So let's bust some myths about life insurance!
Myth #1: It's expensive
Let's get one of the most pervasive myths out of the way first.
Now, life insurance can become more expensive as you get older, particularly if you have pre-existing conditions.
With this said, it doesn't mean that it always has to be expensive. There are still ways that you can save.
Let's look at Zurich's Ezicover Life Insurance as an example.
For as little as $1 per day you can get Ezicover life insurance, protecting your family's future and leaving you to be more worry-free.*
When you first join as a member, the first 30 days of the policy are complimentary – so for the first year, you're only paying for 11 months.
Additionally, Zurich will give you a 5.7% discount if you pay your premiums annually.
Some providers also provide discounts when more than 1 family member takes out a policy, too.
Let's look at Zurich again. When you apply for 2 policies at the same time with Ezicover Life Insurance and they're both accepted, you receive a 10% discount on the second policy.
Myth #2: It's difficult to take out
Prerequisites, endless forms, esoteric requests for information… it would be fair to say that this is the image a lot of us have of the insurance industry.
Fortunately, though, this isn't generally the case when it comes to modern life insurance.
In fact, many life insurers don't even require you to have a medical examination as part of the application except under specific circumstances.
With online and over-the-phone applications now possible, it's usually a much simpler process than in the past.
Myth #3: It's only useful if I die
This is a common – albeit understandable! – misconception about life insurance.
But life insurance policies can be used for a number of different purposes, depending on the type of cover you choose to purchase.
Certain types of cover will allow you to receive payments if you're permanently disabled or receive a terminal diagnosis.
For example, Ezicover Life Insurance can provide you with a lump sum payment if you're diagnosed with a terminal illness.
This means that you're able to focus on yourself and your family, without needing to worry about finance.
Additionally, certain forms of life insurance can be used as a type of safety net.
For example, income protection can be a useful addition to your life insurance if you're the sole earner, or your family relies on your income to pay the bills.
Myth #4: It might not pay out
One of the big concerns people tend to have about any kind of insurance is whether or not it will pay out when the time comes.
But life insurance has a better track record than you might expect. In fact, data from APRA shows that on average, 71% of life insurance claims are paid out within 2 weeks.
Some policies go even further and will even include bridging immediately after the policyholder's death, in order to cover expenses like funeral costs.
Myth #5: It's overly complicated
Insurance doesn't have to be complex.
Any trustworthy insurer will clearly outline what is and isn't covered as part of its policies – as well as any stipulations that might prevent coverage.
You should be able to tell what you're getting from a look at the provider's website or product brochure.
However, you should always make sure to read the Product Disclosure Statement and check the TMD (Target Market Determination) before signing up for a new product.
And if you do find that you're having trouble understanding all the finer details, there are industry specialists who can help.
Insurance brokers can help you navigate the insurance landscape and find the policies that are right for your needs.
Myth #6: Life insurance isn't for young people
People often assume they're too young for life insurance, and that it's something to pick up when you're older.
However, life insurance rarely needs to be claimed at a convenient time – so it couldn't be further from the truth.
In fact, in 2021, Zurich paid out over $8.5 million to people under 35.**
It's also easier to get life insurance at a younger age. So if you haven't previously considered it, now might be the time.