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The Best Insurance Guide |
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Insurance is supposed to be a defense against the risks that we are exposed to day in and day out. This is why insurance myths lead up to wasted time and money-they distract you from the important issues and maybe even from the benefits. Here are some of the most common myths we come across:
- If there’s life, there needs to be life insurance
The purpose of life insurance is to take care of the dependants of the applicant. For example, parents should take out life insurance but children are not expected to do the same.
- Only the main provider needs life insurance
Contributions made by everyone in the household must be taken into account when purchasing life insurance. The father may be the primary breadwinner of the family but if the mother and grown children help to keep the budget ticking don’t forget to get policies in their names.
- Claim as much as possible
Paying premiums does not entitle one to claim for every small loss or damage. If you can afford to pay for a minor problem, it’s best to fix it yourself than to go after your insurance company. The more you claim for seemingly trivial things, the more your premiums will increase.
- Universal/whole life insurance beats all
Buying universal life because you get your money back is not a good enough reason. The premiums are very expensive so it may not be worthwhile long-term. We recommend term life insurance because it’s set for a particular time period with a very reasonable premium.
- No thank you to flood insurance
Flood insurance should not be only for those living in high risk areas such as New Orleans. Anyone living in an area designated by the National Flood Insurance Program is eligible.
- Social Security can substitute for Disability Insurance
You should not rely on Social Security for two reasons. First, you may not be entitled to claim it (only long term disabilities are considered) and second, it takes so long for you to receive benefits. Only disability insurance can match your current salary.
- The Government will pay for nursing home facilities for the elders
This is another negative. Medicare or Medicare Supplemental Insurance does not guarantee such assistance. It’s much more convenient (for your and your family) to go for a Long Term Care Insurance.
- Only the rich should get Umbrella Insurance
Nowadays, the threat of lawsuits and natural disasters are more real than before, due to the complex society we live in. Umbrella insurance gives one added liability protection above the limits on vehicle, homeowner and watercraft insurance policies. This means that you can add an additional 1-5 million in liability protection based on the insurance company.
- The benefits of insurance should equal the premiums paid by you
Insurance need not rush to your rescue every year because its sole purpose is to safeguard you from the real financial disasters. While some may feel that this is a waste of money, those who have had to rely on insurance to cover their damages will know it’s real worth. So pay your premiums with the thought that they will bail you out at the worst possible times that nothing else can fix.
- Only the minimum insurance should be bought
Insurance has more than its fair share of skeptics. But the truth is, you can’t buy insurance halfway and expect to gain a good deal. Skimping on liability insurance is not going to ease financial burdens; it will add to them and also cause a great deal of stress and worry. So if you buy insurance, go the distance. |
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