Insurance 101: Debunking Myths about Insurance

‘I was going to buy a new house, but I fell ill and now I have to pay my medical bills first. If only I had bought insurance!’

This is a common enough story, one that everyone hopes to never have to tell. When life is going well, the last thing we want is a major disruption. However, many still believe that they don’t need insurance, although it can help to cushion the financial blow from such disruptions.

Insurance is a necessity because life is uncertain. Taking the financial stress out of a bad situation can make it much easier to get life back on track. Let’s discuss 5 common myths about insurance and why we need it.

Myth 1: “I am young and healthy. I don’t need insurance, right?”

Your health and youth are blessings to have, and a healthy lifestyle helps in the long run. However, it is impossible to predict what will happen in the future; you can fall ill at any age, and it can have life-changing effects. Such events could put your career on hold, or potentially even end it, because you might have to focus entirely on your recovery.

Insurance can protect you against the uncertainty. What’s more, insurance is cheaper to buy when you are young and healthy!

Myth 2: “Insurance is expensive.”

Insurance will take up a significant portion of your income, but consider which would be less painful: to pay medical bills out of your pocket, or to pay them using insurance pay-outs?

If you feel like insurance is too expensive, perhaps some adjustment to your lifestyle is in order. You can do this by planning your income and expenses on a spreadsheet and understanding how your money flows, then reviewing if you really need to splurge on those items.

You could save money for insurance by stopping non-essential subscriptions, taking the train instead of taxis, and making your own coffee instead of buying it.

Myth 3: “My company’s insurance already covers me.”

It helps to be covered by a good corporate insurance plan, but today’s job market changes rapidly. Jobs can be created or lost in the blink of an eye. If you fall ill when you are between jobs, you may not be covered, and it may affect the insurance coverage you receive at your next job.

You should still get your own insurance because then you will always have coverage to count on!

Myth 4: “I have no dependents. There’s no point in getting insurance.”

Insurance is for you just as much as it is for your dependents. It is possible that you could one day fall ill and be unable to earn an income. In that event, would you be able to sustain your own lifestyle?

Getting insurance can help you to stay financially independent in tough times and make it easier to resume normal lifestyle.

Myth 5: “Insurance is a waste of money. I’ll get nothing out of it.”

The real value of insurance may not be obvious until the moment that you need it, and it is often no longer available at that point. It would help for you to think of insurance as a means of handling uncertainty and providing a cushion against adversity. Disease and disability can disrupt your life entirely, so having protection against such changes can help you feel more at ease.

If you are concerned about whether you will get any return from the premiums paid for your policies, many life insurance plans have surrender values. You may be able to get back some of your money if you ever decide to give up one of your insurance policies. If you hold the insurance policies for a long period, you may potentially receive a higher pay out than your premiums paid depending on the nature of the insurance policies.

Now that you have seen some common misconceptions about insurance debunked, spend some time to think about what is important to you and how best to protect that part of your life.

Remember, insurance is for everyone! Use it to protect yourself against the uncertainties of life. Click here to find out how to get started.

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