Myth 1: ‘I’m young and healthy. I don’t need to buy life insurance until I get older.’
When it comes to buying life insurance in Ireland, you are essentially buying a benefit that will only apply in the event of your death. It is not the most pleasant thought, and not at the top of the average person’s priority list. However, sooner is better than later because the key to buying life insurance is buying a policy when you are young and healthy. The more you delay, the more expensive the premium you will have to pay for the same level of coverage will become. Age and health are major factors which insurer’s take into account.
You have no way of predicting the onset of a medical condition at any age, but as you get older the chances of ill health increase. If you buy your policy now before any condition develops, the premium will be lower. Of course you could be one of the lucky people who never develops high blood pressure or high cholesterol for example, but why take the risk?
Myth 2: ‘I’m single with no plans for a family, I don’t need it.’
Think again. Even the carefree person needs a life insurance policy to cover the costs of medical bills, funeral bills or personal debts, should they arise. Otherwise without a life insurance policy in place, you may end up leaving unpaid expenses to the executor of your will or wider family to deal with. On the positive side, you could leave anything left from the payout of the policy (after funeral or medical bills are paid) to a cause or charity that is close to your heart.
Myth 3: ‘Of course I’m eligible for life insurance, why wouldn’t I be?’
Just because you have applied for life insurance, does not mean you will get automatically approved. The application process is not just a formality. When you complete a life insurance application the insurance company will need to verify all of the information that is available about you. This might typically include your medical history, driving history or even any criminal record you might hold. You need to be as honest as possible in any application as this information will be verified and evaluated. Depending on what a potential insurer might find out about you, your application could result in a higher premium that you thought or it could even be denied.
Myth 4: ‘It’s grand, I’ve term life insurance coverage at work, that’s enough’.
Perhaps, perhaps not. For a single person on an average salary, an employer’s term life insurance policy might be enough coverage. However if you have a spouse, partner, children or other dependents, or you know that you will need coverage after your death to pay funeral expenses or medical bills, then more coverage may be necessary if the term policy that your employer is covering does not meet your individual needs. Speak to your employer about the specifics of the policy and look into upgrading the policy yourself.
Myth 5: ‘I don’t have to think about my health, I’ll just get a ‘no medical exam’ policy’.
One of Ireland’s largest health insurance companies recently announced an expansion into the life insurance market with what media labelled as a ‘no frills’ approach. The cornerstone of the policy is centred on the fact that no medical exam is required. You might mistakenly believe that your health does not matter when applying for life insurance, but it does. It is always a factor. No medical exam policies often contain very specific limits such as age limits and longer minimum contracts. Before you consider a policy like this, be sure to read the fine print.
C & E Freeman Ltd trading as The Mortgage Shop, Easy Life Cover, TMS Financial Services is regulated by the Central Bank of Ireland.
Directors: Eamonn Freeman and Catherine Freeman. Company Registration No. 454380