When I Say Personal Insurance, You Think …
… Life Insurance. This is certainly true for a majority of people. It’s not a surprise really as for many the first time personal insurance comes onto the radar is when a bank adds it as a condition to a loan or mortgage. The other reason of course is the cliched Hollywood story. You know the long-lost relative dies, leaving the policy to the main character, catapulting them to a life of money fueled shenanigans.
Whatever the way you came to know of life insurance one thing that is true is that Life Insurance is possibly the least selfish things that a person can buy. It allows a policy owner to plan for their family’s future, to put a will in place when they may be no money, and to secure their financial contribution to the family will not be missed even though they will be.
In my opinion Life insurance would be better served being called Legacy insurance because that is exactly what it is.
A Legacy Is Not Just Money
A legacy is not just measured in money but in memories too. Most people don’t just die suddenly; they live with a terminal illness. I believe this time should be used to make memories with loved ones that can be cherished by them forever. Who wants to work when they have been told they have 12 months to live? That is why terminal illness cover is so important and it maybe a surprise for some to find that most Life Insurance policies will payout for a terminal illness.
So Why Doesn’t Everyone Have Cover?
There are three main reasons people for why they don’t have life insurance.
There is a perception that Life Insurance is expensive but it is actually incredibly affordable, particularly if you take it out when you are young. For example a 25 year old woman working in an office can get a life insurance policy of $100,000 for about $5 a month. Her male colleague on the next desk can get the same cover for about $3 more.
People also hear that as you get older the policy becomes unaffordable but this is not the case with some forward planning. If we take the 25 year old couple previously mentioned they can get the same $100,000 cover for a set monthly price to the age of 65. She would pay less than $10 a month and he would pay $1 more than her. The price of a couple of coffees a month.
For most people, today is the cheapest that Life Insurance is going to get.
I hear that insurance is hard to understand and the application forms are complicated. This can absolutely be the case if you are having to do the policy comparisons and application process on your own, but that is why independent advisers are here – to do the comparisons and simplify the application process for you. A quick call will help clarify the process. If you want to do it on your own though there are some things to consider.
Lack Of Trust
This is understandable because everyone knows someone with a story. So here are the facts, insurance companies pay out over 95% of all claims. That means less than 1 in 20 fail. Some of those claims were never really claims in the first place. The main reason that claims are denied though is failure to disclose information at application time. Even if it is an accidental omission, it makes no difference. The onus is on the customer to tell the full truth. This is another great reason to get an independent adviser in your corner at application time. A good adviser will also be there to go on hold for you at claim time. Find out how to pick a great adviser here.
So What Does This Actually Mean?
- Life Insurance is a chance to have a legacy.
- A good Life Insurance policy will pay out if you are terminally ill.
- Life Insurance is more affordable than people think.
- An adviser can make the application process simple.
- Almost every claim on a life insurance policy from a proper company is paid out.
- Life Insurance is worth speaking to a professional about.