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Debunking Common Misconceptions About Life Insurance

Death is a topic most of us prefer to avoid discussing, yet it’s a fact of life that can affect anyone at any time. Unforeseen illnesses and premature deaths occur daily, underscoring the importance of having a plan in place to safeguard your family’s future.

There are numerous misconceptions and myths that often deter individuals from considering life insurance as a viable option. To help you make an informed decision about whether life insurance is right for you, we’ve compiled a list of the five most common myths and misconceptions.

Myth: “I’m too young to think about life insurance.”

Reality: 

Many people may think they are too young to consider life insurance, but it’s essential to understand that life insurance isn’t solely for older individuals. Here are a few reasons why even young adults should purchase life insurance:

Financial Protection: Life insurance can provide financial security for your loved ones in the event of your unexpected passing, regardless of your age. It can cover funeral expenses, outstanding debts, and other financial obligations, alleviating the burden on your family.

Health Considerations: Health issues can arise unexpectedly, and they may make it challenging to secure affordable life insurance later in life. Delaying your decision to obtain life insurance can result in higher costs, not only because of your age but also due to the increased likelihood of age-related illnesses and conditions. 

It’s advisable to purchase life insurance while you’re in good health. By doing so, you increase your chances of qualifying for coverage and potentially secure more favourable premiums. 

Locking in Lower Premiums: Life insurance premiums tend to be lower when you’re younger and healthier. By getting a policy early, you can lock in these lower rates, potentially saving money in the long run.

Benefits For When You’re Still Alive: Some policies have additional benefits you can enjoy while you’re still alive, such as the Hospital Cash Benefit, which offers a daily cash benefit for each day you spend in the hospital.

In summary, age shouldn’t be the sole determinant when considering life insurance. It’s a responsible financial decision that can benefit you and your loved ones at any stage of life.

Myth: “Insurance companies don’t pay out.”

Reality:

It’s rare for life insurance not to pay out. The primary reason why insurance companies don’t pay out is non-disclosure. When applying for life insurance, make sure you answer the questions about your health and lifestyle truthfully.

Reports from Royal London and Aviva, which detail insurance claims in 2021, reveal that the majority of life insurance payouts in Ireland were given to families (as illustrated below).

Myth: “I have no children, so I don’t need life insurance.”

Reality:

Life insurance serves to replace lost income, making it relevant even if you don’t have children. If you have a spouse or partner who relies on your income or shares financial responsibilities with you, life insurance can provide them with financial support and stability if you’re no longer there to contribute. Business owners with partners or dependents can also benefit from life insurance.

If nobody would suffer financially from your loss, you might consider Serious Illness Protection or Income Protection, both of which offer valuable coverage in different scenarios as follows.

Serious Illness Protection:

Financial Security During Illness: Serious Illness Protection, also known as Critical Illness Insurance, provides financial support if you are diagnosed with a severe illness or condition listed in your policy. It offers a lump-sum payout upon diagnosis, allowing you to cover medical expenses, treatment costs, or any lifestyle adjustments required.

Flexibility: Unlike life insurance, Serious Illness Protection focuses on your well-being while you’re alive. It ensures you have the financial means to access the best medical care and maintain your quality of life during a health crisis.

Income Protection:

Protecting Your Earnings: Income Protection Insurance is designed to replace a portion of your income if you become unable to work due to illness or injury. It ensures that you can meet your day-to-day financial commitments, such as bills, rent or mortgage payments, and living expenses.

Peace of Mind: Income Protection provides peace of mind knowing that you won’t face financial hardship if your ability to earn an income is temporarily or permanently compromised.

Both Serious Illness Protection and Income Protection policies can be tailored to your specific needs and circumstances. They offer financial stability during challenging times, whether it’s due to a serious health condition or an inability to work.

Myth: “Life insurance is expensive.”

Reality: 

While life insurance costs vary depending on several factors, a general rule is that the younger you are, the lower your premiums will be. You can establish financial protection for your family with a tiny proportion of your income, ensuring they have the necessary resources in case of your unexpected death.

To get a personalised quote, reach out to us today. We can advise you on the best life insurance plan that suits your goals and needs.

Myth: “I don’t need life insurance because I get it through work.”

Reality: 

Some employers in Ireland provide life insurance as part of their employee benefits package. Under this arrangement, if you pass away, your employer would provide your family with a tax-free lump-sum payment, typically equal to three to five times your annual salary. 

However, it’s crucial to evaluate whether this coverage meets your specific needs. As a rule of thumb, you need to multiply your income by ten to determine the right level of life insurance coverage. You might need additional protection if your employer’s policy falls short.

Also, if your employer’s plan does not include Serious Illness Protection, you might want to explore a separate, standalone Serious Illness Protection policy.

Why Choose True Wealth for Life Insurance in Ireland?

At True Wealth, we aim to address all your concerns about life insurance. We understand that each individual’s financial situation and goals are unique. That’s why we strive to offer a comprehensive range of insurance products and services tailored to meet your specific needs.

We at True Wealth are experts in personal and business financial planning, retirement planning, pension tracing, savings and investments, and wealth management. We also provide services for Life Insurance, Serious Illness, Income Protection, and mortgages.

Get in touch today!

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