Life insurance is an important part of financial planning and each day families welcome the benefit financially from insurers. The Association of British Insurers (ABI) recently reported that insurers pay out £13.9m per day in income protection, critical illness cover and life assurance. Roshani Hewa, Assistant Director, Head of Health and Protection at the ABI, says: “Protection products provide vital financial support in people’s time of need. To see that the industry has collectively supported families with more than £5 billion in 2017 for the first time ever is incredibly positive”.

Nevertheless, some British families could be at risk of financial hardship because they have no life cover in place, or the cover amount is insufficient – unfortunately, some people can overlook protection insurance due to misleading information and misunderstandings.

Life insurance myths

Here we are busting some of the most common life insurance myths – we deal in facts and believe that no family should be misinformed when considering taking out protection.

Life insurance is too expensive
The cost of your life insurance policy will vary depending on your age, health, occupation and lifestyle, however, it could cost a lot less than you think. If you choose to get advice and a quote from an independent broker, rather than a comparison site or direct from the insurer, you could find that the price you pay is a lot less. This is because a broker will often have access to a variety policy options (some policies that you may not find yourself through a comparison site) and they’ll tweak and tailor the cover amount and term to help keep costs down.

It’s a broker’s job and skill to search for the policy that best suits your individual needs and your budget. They’re professionals that will use their know-how to find a policy that is tailored to your needs - rather than you selecting something that is designed to cater for lots of different people that can be bought ‘off the shelf’ – so you won’t end up paying an increased premium for benefits you don’t need.

I bought life insurance years ago. I don’t need to review it
Not all life insurance policies are the same and chances are if you bought your life insurance years ago then your personal circumstances may have changed and there may be a benefit to reviewing your policy to make sure it still covers your needs. However, beware the cold callers offering to switch your life insurance to a cheaper deal - they could cost you dearly!

It’s been reported that a number of firms have been set up to cold call people with existing life insurance or critical illness cover, offering to cut the cost. But what these pushy sales operations fail to tell the people they target is that while premiums might work out cheaper if they switch, they may also lose benefits and end up with a worse deal.

Receiving a cold call from any financial services provider should ring alarm bells and our suggestion is if you’ve already taken advice from an independent broker, who is legally bound to give you advice appropriate for your circumstances and you bought your policy through them, then keep them informed when your circumstances change.

If you have found yourself a good broker they may contact you if they believe there to a genuine reason for having a review or switching – and if your personal circumstances have changed significantly, you should make them aware. If you bought your original policy through an independent broker, who has gone through the full application process with you, they’re probably better placed than a pushy cold caller, to give you appropriate advice.

This is why the Money Advice Service stresses the importance of finding an independent broker in the first instance. They say that “brokers have specialist expertise and can give you guidance on the products that best suit your needs”.

It’s not worth buying unless there’s something in it for me today!
For most people, life insurance is about providing financially for your loved ones when you are gone. But increasingly insurers are coming up with ways to get more people buying their products by making them seem more attractive to the purchaser too.

No-one should be tempted to buy life insurance just because of the perks on offer. But if you are considering your options we think it is worth looking more closely into what you’re being offered.

We don’t think that policies should be purchased purely on an incentive of shopping vouchers (or a pen), but there is value in shopping around for a company who can give you the benefit of sound advice and an invaluable recommendation – especially if you are not sure about the type of cover that you need.

By doing your research and finding an independent broker with a good reputation, who is qualified to give you advice, the benefit here and now may not come in the form of shopping vouchers, but it could be priceless!

Here at Essential Insurance, we’re authorised and regulated by the Financial Conduct Authority, which means we are legally, and duty bound to explain why a particular policy or provider would meet your requirements and needs - and we are authorised to give you a recommendation that’s tailored to your needs.

You won’t pay us a penny for this level of service and responsibility, but without doubt, there is a true value associated with a company, such as ours, who takes care to ensure the suitability of any advice given.

To find a life insurance policy that suits your needs through Essential Insurance – call us today 0800 612 8005