7 Myths about Life Insurance that will destroy you

Posted 6 November, 2015 by Clearly
in Pitfalls to Avoid

Even Zues is more credible than some of these myths

We suspect the Life Insurance is like the Roy Ngerng of the financial world: everyone is aware it exists, heard of its presence, yet it gets avoided like the plague. When people think of a life insurance agent, they rank him as trustworthy as your average used car salesman. Still, it is something that almost everyone needs and not having it can result in tragic financial consequences. Lets debunk 7 of the most pervasive myths about insurance today:

Myth 1: I am still young and healthy, I don’t need insurance. At least not now


I am too stronk!

Unless you are young, healthy, and psychic, then do your best to get covered. If you are somewhat like me and cannot really see what is around the corner, then being young and healthy is not a reason to avoid buying life insurance.  As soon as you start earning your keep, you should allocate some percentage of monthly finances to insurance.

Also. life insurance actually makes the most sense when you’re young since the premiums are less expensive. The longer you wait, the more expensive it will tend to be and the more likely you are to develop a medical condition that makes it much more expensive. Of course, the biggest problem with procrastinating life insurance is that by the time you need it, it’s too late to get it.

Besides, I’ll let you in on a little secret: Life has a 100% mortality rate. Scary, right?

Myth 2: I am too old and too unhealthy to buy insurance


Whats the point? I’m nearly there anyway

There are plans galore that can accommodate your health needs and conditions. We recently posted on remedial actions to take when you have been declined for insurance here.

Bottom line is, even people considered high-risk can usually find policies catered to them, even though it may cost more. The substantial benefits far outweigh the cost of insurance and as long as you are upfront about your situation, you will be surprised at what options lie in wait for your choosing.

And also, this is also a good reason to buy insurance while you can – just see the myth above.

Myth 3: I have excellent work place benefits and it covers me more than adequately. Even my spouse and children are covered.


No thank you, I am well taken care of

Again, unless you have the unique ability of being psychic and foreseeing yourself to be under the umbrella cover of a workplace forever, you really should get your own policies.

Having life insurance as part of your employee benefits is great, but it is usually not good enough. Employer-paid policies usually only cover one to two years’ salary or an even more modest flat amount. We recommend you have at least 6 to 12 times your annual salary to cover related expenses and income replacement for dependents.

Employer policies also end when you leave the company, and those policies may not be portable.(they terminate when you leave the company) Having your own personal policies will ensure that you’ll always have coverage in the event of unexpectedly losing your job.

Last we heard, the world’s largest banks, manufacturers, and software companies do layoff people from time to time.

Myth 4: Buying Life Insurance is a chore / hassle / time draining / muscle numbing endeavor


Uh huh, this is page 2. Only another 76 pages to go?

Buying decisions are never easy, we know. But just like car insurance, hotel stays and airfare, you can now compare life insurance plans easily online. We know of one superb site here.

Don’t know what life insurance is? We know of a great place to start here.

Want to ask specific questions on insurance? Surprise! We know of a great forum here.

Its really that easy – we designed it that way.

Myth 5: I just need to buy term and invest the difference, no other policies are necessary

Warren Buffett

Is this your selfie?

If your last name is Buffet and you have decades of consistent, superior investment returns, we are inclined to believe you know how best to manage your money. Else the propensity for mistakes are always there: a bear market happening when you least expect it, the temptation to splurge on a holiday or branded watch, a hot stock tip that goes awry.

For most people out there, whole life plans not only gives cover, it also ensures the policy owners are forced to be disciplined when it comes to money. Self Investment is definitely a worthwhile skill to acquire, but there is no sense in putting all your eggs in one basket – and seeing the handle break.

Myth 6: I have no dependents, so I don’t need insurance.


I hang alone, kid

Being single or without dependents means you don’t have to take care of anyone, great. But it also means that you don’t have anyone to take care of you. No so great.

Assuming you plan to be a little selfish and disregard any personal debts and funeral expenses incurred upon your passing, what about medical costs? The most dreaded condition here in Singapore is to remain alive while contracting a serious illness – for it means a fortune to be spent on treatment and recovery. You owe it to yourself to help the person in the mirror!

Life insurance is also a way to leave an estate behind, and for singles to leave a legacy to their charity or cause of their liking. SPCA anyone?

Myth 7: Insurance is so expensive, I really cannot afford it. Can we change the subject?


yes yes! exactly the movie I was thinking of

Most people overestimate the cost of insurance, not only because they don’t have a clear idea of what it really costs, but also they are not convinced of the value it brings.

From an absolute dollar perspective, you just need to set aside 10 – 25% of your monthly income in life insurance – that is more than enough, even with the assumption that you just entered the workforce.

From a psychological perspective, if you cannot afford life insurance, then you definitely cannot afford to go without life insurance. (I hear the agents applauding loudly at the back) If you cannot shell out the 50 – 100 bucks a month to maintain some semblance of cover, won’t your family be financially devastated if you pass on, are unable to work, or contract a serious illness to be treated?

If you treat yourself to a latte every now and then, you definitely have enough to be covered – even if just modestly.

Do you agree with our myths here? Let us know in the comments below!

www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

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