6 COMMON INSURANCE MYTHS DEBUNKED

Insurance serves as a risk management tool. It provides financial security and relieves your family of financial burdens that may arise due to your passing, debt, education, or medical expenses. Despite being an essential tool in risk management, insurance is clouded by myths and misconceptions that have left individuals confused and uncertain about their coverage needs.

We have demystified some common myths in this blog to help you gain the clarity you need when seeking insurance solutions.

Myth 1: Insurance is Only for the Wealthy or Elderly

Insurance is vital for people of all ages and income levels. Whether young or old, insurance can provide financial protection against unexpected events such as accidents, illnesses, or property damage.

Myth 2: Insurance is a Waste of Money if you Never Use It

While it is true that insurance premiums remain payable whether or not you make a claim, insurance provides peace of mind and financial protection. Just like other forms of risk management, insurance helps mitigate the impact of unexpected events. Knowing you are covered provides some reassurance even if you never need to file a claim.

Myth 3: All Insurance Policies are the same

Insurance policies vary widely in coverage, limits, exclusions, and pricing. Always carefully review the details of each policy to understand what is and is not covered. Additionally, different insurers offer varying levels of customer service and claims handling, so it’s worth comparing options before deciding.

Myth 4: Cheaper Insurance Policies Provide the Same Coverage as Expensive Ones

Price is a factor to consider when choosing an insurance policy. However, it should not be the only consideration. Cheaper policies may offer lower coverage limits and more exclusions, which could leave you underinsured. It’s important to balance cost with coverage and quality of service.

Myth 5: Insurance Companies Deny Claims to Avoid Paying Out

Insurance companies are obliged to act in good faith when handling claims. However, they also need to have procedures in place to assess claims and prevent fraud. In the event of a denied claim, they must provide a written explanation of reasons for denial. Insurance companies always evaluate and pay legitimate claims as per the policy terms.

Myth 6: Life Insurance is Unnecessary if You’re Young and Healthy

Life insurance is often associated with older adults, but it is also valuable for younger individuals. Younger people tend to have good health and a lower mortality risk, which serves as a factor when determining life insurance premiums. It then results in affordable premiums when compared to the costs charged to older individuals.

Conclusion

These are just a few of the common myths and misconceptions about insurance. Insurance can be confusing. Consult your agent or financial advisor for information on insurance plans, their coverage limits, benefits, and exclusions when buying insurance.