Life insurance is a vital product for all South Africans, from those just starting out, to new parents wanting to give their children the best they can offer. Unfortunately, many misconceptions surround life insurance, and these often prevent people from effectively securing their futures and those of their loved ones. We tackle six common life insurance myths to show how useful and essential life insurance might be for you:
I’m single, so I don’t need life insurance:
The opposite is true, because, during our lifetimes, we are faced with events that can happen suddenly and change our lives forever. Planning for such eventualities means you won’t have to rely on others for financial or personal care.
My spouse and I are both young and earn great salaries. We don’t need life insurance, because we save:
Though all is well, you need to consider what could happen if one of you passes away unexpectedly, becomes ill for a long time or too disabled to work. In such cases, it is possible that one income is not enough to cover all the household expenses and family needs, plus medical support.
Life insurance is to provide for children. We don’t plan on having a family:
Spouses need to rely on each other for support, even if there are no children in the equation, as demonstrated above.
I have a group policy arranged by my employer, so I don’t need anything extra:
Group cover is a great employment perk, but coverage is usually restricted to 12 or 24 months’ salary. This may seem like a significant amount, but if you pass away before you retire, funds could be limited.
I can get better returns from the stock market:
Life insurance is designed to provide certainty about the future and help you through unexpected events. There’s always place for equity investments in a personal portfolio, but there is no guarantee that equity based savings will perform satisfactorily year after year.
Because I stay at home and don’t earn a salary, I don’t need insurance:
Before making this assumption, do some calculations. For instance, if you are a stay-at-home mom, what would happen if you pass away or become disabled, and your spouse had to hire services to take care of the children’s needs? Could the family afford it?
If you have a family or partner, life insurance could be essential for you. A monthly premium is a small price to pay in return for financial certainty and peace of mind.