5 Myths Every Mum Needs to Know About Life Insurance

July 16, 2014 by Georgina El Morshdy

How far would you go to protect your kids?

If you’re a mum, I’m willing to bet that those limits are almost infinite.

That instinct and calling to do whatever you can to ensure your kids are happy, safe, and have the best life possible is built into a mum’s DNA.

It’s just the way that we are – and probably the way we need to be.

After all, in an environment of unconditional love children can thrive.

I think this is why lots of mums choose to cover their life. That way they know if the worst should happen their children don’t suffer financially. It’s kind of like a love letter from beyond!

But despite this huge benefit, there are still mums who are yet to buy insurance.

And what we’ve found here at Life Insurance 4 Mums is it’s often a myth that’s getting in the way.

Are any of the following myths stopping you from protecting your family?

Let’s find out?

Myth 1: You can’t control where your life insurance pay out goes if you die. 

Would you like any life insurance pay out to go to a specific named person (or people) – your children perhaps?

Have you held off investing in life insurance because you believe the money could end up in the hands of someone who you didn’t want to benefit?

Would you be surprised to know that if you wrote your policy “in trust” you can actually specify WHO gets the money?

If your home situation is complicated, or you’d prefer your pay out to go direct to your children, you can ask your insurance company to set up your policy to meet these specific requests. What’s more, writing a policy into trust won’t cost you any extra – just remember to ask when you take out a premium.

Myth 2: Life insurance is for life!

Are you worried about committing to life insurance payments every month for the rest of your life?

Despite the terminology, “life insurance” doesn’t necessarily mean life.

You see, if you buy fixed-term cover, your policy will terminate on a specified date in the future.  So for example, if you take out cover when you’re 20 for a 25-year period to cover the duration of your mortgage repayments, your cover will terminate when you’re 45.

That said, you do have the option to pay premiums for life.

Whole-of-life cover is for life – and this is the policy to choose if you want to guarantee your kids a cash payout whenever you die.

So you see, you have control over the duration of your policy. The length of cover is up to you. Just pick a policy that meets your personal financial situation.

 

Myth 3: EVERYBODY needs life insurance.

This isn’t true. Everyone DOES NOT need life insurance.

For example, if you have no dependents then you probably don’t need to ensure your life.

However as a mum, life insurance is a wise investment. Even if you don’t work, it’s still worth having your life insured. That’s because in your absence, your family will suffer financially (for starters, childcare is not cheap).

Insurance companies aren’t just trying to sell to you for selling sake.

Life insurance is a product you can genuinely benefit from if you want to protect the financial security of your kids.

Myth 4: If I’m ill or injured insurance companies WON’T cover me.

Don’t assume you won’t be able to get life insurance because you have a pre-existing illness or injury. Whilst your level of cover may be restricted OR your premiums may be slightly higher, you can’t know for sure what your individual cost will be until you request a quote.

I’ve heard that a number of mums don’t even explore the benefits of life cover because they assume that those benefits are not available to them. But this simply isn’t the case. Don’t let this myth prevent you from protecting your family. Just get a quote, so you know for sure what’s available to you.

Myth 5: Life insurance is expensive.

Actually, life insurance is not as costly as you think. Because there is so much choice and so many products on the market, you should be able to find something that suits your budget and your needs.

The real risk is NOT having insurance – especially if the worst happens. In that scenario, life insurance will look extremely cheap.

What do you think?

Which life insurance myths have got you confused? Are there any other myths that you want to question? Please let us know in the comments below. And if you’ve found this post useful please do share with other mums that you know.

Coming soon… because the issue of life insurance myths is so important, we’re in the process of recording a short video series, which will explore these five myths in more detail. If you’re thinking about investing in life insurance, this series will make essential viewing. We’ll be posting the videos to our YouTube channel within the next week. We’ll also send you an email (if you’re on our list) when they’re live. So watch this space!

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