We disprove some of the most frequent myths about life insurance, so that you have all the information and see how useful they really are.
More than 20 million people in Spain have risk life insurance , according to data from Unespa , the sector’s employers’ association. These products ensure that, if something happens to you and you die, your beneficiaries receive the amount of money that you have chosen. In exchange, a premium is paid, which is usually annual.
The most frequent myths about life insurance
20 million people cannot be wrong and buy a product that is not good for them, right? For this reason, in this article we tell you several myths about life insurance, false or half-truths that are told about them. Check them out and find out why a lot of what you’ve heard is wrong.
Table of Contents
Myths about life insurance that you should not believe :
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They are not for older people
The first and most frequent of the myths about life insurance. It is very likely that you have heard it before: there is no for those over 65. Why is this statement not true?
Of course there are options for people over 65 , although they are a bit scarce and you have to know how to look for them . In our comparator it is very easy, because you insert your age and all the options that you can choose automatically appear.
Insurers set an age limit for contracting , that’s true, but there are several that allow you to sign it even up to 70 years (Liberty, for example). The most common is that, from the age of 65 or 67, the coverage that can be added to the contract is reduced, but they continue to cover death until the age of 75 or 80, depending on the company you choose.
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They do not compensate in the long term
The goal of any life insurance is to never need it. They are a safety net in case everything fails and you want to have the peace of mind that your family will not suffer for the money. Everyone’s hope is that you never find yourself in the situation of having to collect compensation.
However, it is possible that someone has once told you: even if they pay compensation, they never give you as much money as you have paid. So aren’t they worth it?
The data disproves this myth. If, unfortunately, the insurance has to act, there is a very good chance that it has compensated you. According to data from Unespa, only 4 out of 100 people died after paying more than 30 years . On the contrary, 30% of those who had one died 5 years after signing it . The figures show that you are much more likely to pay for having one than to pay for nothing.
Let’s imagine that, in 8 years, you have paid about 2,000 euros in premium (about 250 euros each year) for a capital of 200,000 euros. If you died, your family would get 200,000 euros in exchange for 2,000.
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They are only for families with children
There are many people who can benefit from these policies and do not know it , such as single people or those who live alone. They are usually associated with families with children or mortgages, but we never think of those who are alone. However, in your case it is even more important to have financial backing in case something happens.
If you’re single or don’t live with anyone else, there are some questions you need to ask yourself. Have you considered what would happen if you had an accident and could not return to work? What if you need the help of a person to take care of you? How would you assume your expenses without having a full salary? For these cases, disability coverage can be added to these policies. In the event that a person is recognized as permanently disabled, the compensation money will go to the insured himself, to help him face his new situation and the loss of his usual salary.
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They are expensive
The other great myth related to money. If you enter our comparator, you will see with your own eyes that it is not true. For less than the cost of going out for dinner a couple of nights , you can hire capital that would protect your family for several years. They are even cheaper than other common expenses, such as car insurance.
However, it is possible that this myth has spread because of the banks. According to a 2021 study, policies sold by banks are up to 93% more expensive than those sold by insurers. That is, they cost almost twice as much and offer nothing different. If a person decides to hire him with his entity instead of going to a specialized company, he will have too high a premium.
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They only cover you in case of death
This statement is only half true. Life insurance can be of many types, and they all cover death for any reason : accidents, illness… The most basic one pays compensation only when the insured person dies, but there are those that cover many other assumptions.
For example, and as we have already mentioned, there are policies that pay you if you suffer a disability that prevents you from returning to work . There are also those that give you compensation if you are diagnosed with a serious illness . There are even those that pay you double or triple what was agreed if you die in a specific way (for example, in a traffic accident). Thus, there are many more circumstances besides death that can be covered with these policies. Depending on your situation, one or the other will be more useful to you.
Have you heard any of these myths about life insurance? Don’t let misinformation stop you from protecting your family’s future. Take a look at our comparator and convince yourself that they give you a lot for very little. Do you still have doubts? Contact our advisers without obligation!