5 Common Insurance Myths – Busted!16 Jul 2021
There are some misconceptions about insurance that continue to persist to this day. These misconceptions have magnified the burden of many uninsured people who face major health and physical challenges.
Don’t let false beliefs prevent you from getting the financial protection you need.
We debunk five of the biggest and most common insurance myths out there:
Source: Katy Perry
MYTH 1: I’m young, healthy and single with no dependents, so I don’t need insurance
Fact: Insurance may seem unnecessary when you are young, single and in good health with little to no debt. But keep in mind that everyone will experience significant life changes as the years go by.
Even if your marital status doesn’t change, your financial status and other life circumstances are unlikely to stay the same as you grow older. Possible scenarios include your parents, siblings or other family members becoming financially dependent on you. You could also still be paying off your debts, as your spending and likelihood to take on debt increases as you get older (eg. car and housing loans, credit cards).
As you age, there will be changes to your health as well. Depending on your lifestyle and family health history, you may be more susceptible to certain medical conditions, and this risk increases as you get older.
MYTH 2: Insurance is expensive
Fact: You have nothing to lose by getting insurance at a young age. In fact, when it comes to insurance premiums, young and healthy = cheaper. In other words, you save lots of money! If you are young and healthy, you qualify for lower, more affordable premiums. Insurance can be expensive if you have existing health issues, or if you are older.
MYTH 3: I already have insurance from my employer
Fact: Coverage from insurance policies provided through your full time job tend to be one-size-fits-all, which is typically not comprehensive enough for your specific needs. Employee insurance coverage is also not permanent - it ends once you decide to leave the company, or when you retire.
This is why having your own insurance plan is critical to prevent any gaps in your coverage for the long term.
MYTH 4: Savings is more important than having insurance
Fact: Yes, saving is a critical aspect of financial planning. But without insurance, your savings can potentially get wiped out easily if an unexpected event happens to you (eg. an accident or critical illness that leaves you disabled or limits your ability to work). The sudden increase in expenses and/or loss of income can leave you vulnerable, and rebuilding your finances will be a challenge.
An insurance plan protects your hard-earned savings and income from these uncertainties, and ensures you and your loved ones can carry on with your daily lives. It can also help you meet your other financial goals such as having an emergency fund, growing your wealth via investing in stocks or unit trusts, buying a car, travelling, or starting your own business.
Source: The Animal Crackers Movie
MYTH 5: I bought insurance years ago, so I’m all set for life
Fact: Good for you! However, insurance isn’t something you buy once and forget about. As we highlighted earlier, life happens, and your circumstances change as the years go by. So it’s important to regularly review and update your protection plan to ensure your coverage remains adequate.
Now that you are better informed about insurance, we hope this will help you make the right decision for yourself and your loved ones.
Gibraltar BSN has a wide range of insurance to give you financial peace of mind. To learn more, browse our list of insurance FAQs or read our article, “How Often Should I Review My Life Insurance Plan?”. If you have a specific question that’s not covered and would like us to contact you, leave your details here and one of our Gibraltar BSN agents will be in touch.