Life Cover Myths

Debunking common life insurance myths

Life insurance is perhaps one of the most misunderstood areas of personal finance which could be stopping people from getting the cover they need. For example, people often think life insurance is only for older people. In fact, it plays a vital role for people in their 20s, 30s and 40s — especially those with financial obligations such as mortgages, children or other dependents.

Variety of cover

There is more than one type of life insurance. Different plans offer varying features and costs. Whole life insurance provides permanent cover, but it is typically more expensive. Term life insurance, by contrast, offers cover for a specific period — usually 10, 20 or 30 years — and is generally cheaper.

Work cover

People frequently assume the life insurance offered by their employer is sufficient. However, workplace policies typically provide a death benefit equal to one or two years’ salary. This may cover short-term needs, but won’t support a family over the long term. Having a separate policy would see cover staying in place regardless of job changes or redundancy.

As with all insurance policies, conditions and exclusions will apply. Your home may be repossessed if you do not keep up repayments on your mortgage

Source: https://uk.finance.yahoo.com/news/suze-orman-debunks-4-common-131922563.html