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Here at 1Life we spend a lot of time talking to South Africans about life insurance. Over time we have come to realise that not only are there a lot of misconceptions out there about life insurance, but also that some of these misconceptions are dangerously misleading. Read on to discover the truth behind some of these myths.
Myth: I don’t need life insurance because I am a stay-at-home mom/dad
Not true. Think about it this way. As a stay-at-home parent you work hard for your family. From laundry, cooking and cleaning to taxi services you have your work cut out for you. If you passed away unexpectedly how much would it cost your spouse or partner to pay someone to provide these services for the family?
Myth 2: I don’t need to worry about my life insurance policy once I have bought it
So many people make this mistake. Your life insurance benefit amount was calculated based on your assets and liabilities at the time you purchased your cover. Over time your circumstances will change and some of these changes will impact on the amount of cover you need, for example the birth of a child, marriage or divorce. You therefore need to review your policy every 6 to 12 months or whenever one of these changes occurs.
Myth 3: Everybody needs life insurance
False, but this is a tricky one. You don’t need life insurance if the value of your assets will pay off your debt, cover funeral expenses and the costs of settling your estate as well as provide for your family. While this statement is true in theory the reality is that this will never be the case for most of us.
Myth 4: I would rather invest my money than pay life insurance premiums every month
Very risky. Yes, you might have amassed a small fortune by the time you turn 50 but what if you die next year or even next month? How much will your investments be worth by then and will this be enough to pay off your debts and provide for your family? A life insurance policy will pay out your full benefit amount immediately, even if you have only been paying premiums for a year.
Myth 5: Only breadwinners need life insurance
This is a common mistake. For the young and single a life insurance pay-out will cover funeral expenses, the cost of settling your estate as well as any debt or unpaid medical bills you might leave behind. If you are married without children your partner relies on a joint income to pay your debt and to maintain the standard of living he/she is accustomed to. Find out more about life insurance from 1Life.
