Common Insurance Myths

Insurance can seem complicated and difficult to understand. With any complex product, it is inevitable that myths form.

Let’s take a moment to clarify matters and dispel some of the major ones:

MYTH # 1: Permanent Life Insurance Is a Waste of Money - Totally Not Worth It!

Permanent Life Insurance isn’t a waste of money; it is an investment and an attractive one at that!

Permanent Life insurance policies provide the opportunity to get lifelong coverage and build cash value which accumulates on a tax-sheltered basis. It can be used as a safe, predictable and secure investment planning tool for families and corporations, providing sizeable tax benefits. For instance, death benefits are also generally structured to be tax-free to the beneficiary.

Did you know permanent life insurance can also provide income in the future years?

Permanent Life Insurance can be structured to provide you and your loved ones with financial protection while building an asset that can be also used during your lifetime.

MYTH # 2: Insurance Companies Don’t Like to Pay Out on Claims

Insurance companies are mandated to pay out on claims; it is only in exceptional circumstances that claims are rejected.

According to the Canadian Life and Health Insurance Association (CLHIA), Canadians received $103 billion in benefits from life and health insurers last year, which is an increase of 60 percent over the last decade.

The exceptional circumstances where claims are denied are for reasons such as non-payment of premiums, policy exclusions, insufficient information or misrepresentation on applications (either intentionally or unintentionally).

MYTH # 3: I Don’t Need Life Insurance If I Am Young and Single

Life insurance can benefit everyone, whether you are single or married, live in a rural or urban community, and have children or not.

Life insurance isn’t only for people with families; it can be useful for anyone who has financial dependents such as siblings, parents, or even a business partner.

Young adults are usually less inclined to purchase life insurance. What many fail to realize, is the benefits of buying when you are younger:

· It's cheaper

· Less underwriting

· Your investment benefits from compounding over a longer time horizon

You may plan to:

· Get married

· Have a baby

· Support aging parents

· Have debt

· Start a business

All are smart reasons to secure a life insurance policy at an early age and you stand to save money over time.

MYTH # 4: Insurance Companies are Slow to React to the Changing Landscape

Insurance companies have been quick to react to changes in the market and work hard to ensure their products reflect the times.

No one expected to be hit by a pandemic this year and experience the ensuing loss and uncertainty. Insurance companies have worked diligently throughout the year to help ensure individuals remain protected and their insurance coverage is uninterrupted during this unprecedented time.

Since the beginning of the COVID-19 pandemic, life and health insurers have been supporting Canadian businesses and individuals alike. Insurers covering workplace health benefits (including prescription drug coverage) have helped employers maintain benefits by providing premium reductions and other forms of premium deferrals to help reduce costs.

Desjardin Insurance is one of many insurers that have provided relief by allowing clients to defer payments for up to 90 days, if they were impacted by the pandemic in any way.

Insurers have also introduced digital options for customers to manage risks and mitigate against losses.

If you have any other questions about insurance policies and how they can help you, contact our professionals at info@dkcanada.ca and we will be glad to help you make well-informed decisions.

Sources:

Common Insurance Myths

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