Is Taking out Life Insurance a Complicated & Slow Process?

Life Insurance tends to be something that many of us give as little thought to as possible until we absolutely have to take out a policy. As a result of this a great deal of confusion exists around what life insurance actually is, who needs it, and the process of securing cover. Below we’ve looked at 5 Life Insurance myths and separated fact from fiction to make sure you’re as informed as possible.

What are Some Life Insurance Myths?

Just like with most things in life, the internet has helped to make the process of securing life insurance much easier. With AA Ireland’s Quick Quote you can provide some basic information about the level of cover you require and get an instant estimate for how much the policy will cost.

If you decide to take out Life Insurance with AA Ireland, we can get you on cover within a few hours of receiving a completed application form if you’re in good health. If you happen to have a pre-existing health condition, such as high-blood pressure, it may take a little longer but generally speaking, getting on cover is much easier now than ever before.

1. Well, I Have Mortgage Protection so I Don’t Need Life Insurance

While many people get life insurance and mortgage protection confused (check here for out handy guide explaining the differences) life insurance may offer greater protection for your family than mortgage protection. Unlike life insurance, mortgage protection is payable directly to the mortgage provider and not to your family. This means that, in the event of your passing, your family won’t receive a lump pay-out which they can use to cover basic living expenses, education costs, or as a replacement for your income.

When applying for a mortgage your provider will likely insist that you take out mortgage protection policy with them. You do not have to take the Mortgage Protection policy offered by your Mortgage Provider and are free to shop around.  Taking out another life insurance policy, separate to your Mortgage Protection will help offer your family greater security if the worst happens, as well as allowing them to keep the roof over their head.

2. I Don’t Need Life Insurance, I’m Young and Healthy

While it may be tempting to delay taking out a life insurance policy until later in life, taking out cover at a younger age can help you save money in the long-term. As the risk of ill health increases as you get older, waiting to purchase cover could increase your premium if any condition develops as you get older or even run the risk of being refused cover based on poor health.

As insurers will calculate your premiums based on their likelihood of paying out on the policy, purchasing cover when you’re younger and fully healthy could significantly cut the cost of your policy. The smart option is to start your cover when young and healthy and then review your cover needs in the future as your family and career circumstances change.

3. My Job Provides Life Cover, so I Don’t Need a Separate Policy

Some employers may offer life insurance for their staff and while this is certainly a handy perk, it may not provide you with all the cover you would need. In many cases employer provided life insurance will only cover a pay-out of up to four-times your annual salary, so worth checking with HR. If this amount wouldn’t be enough for your family to meet their basic needs in the event of being left without your income then taking out an additional separate policy may help provide you and your family with some much needed peace of mind. It’s also important to note that such perks are generally not transferable if you leave your employer, your new employer or career path may not offer free life cover benefits at all. Taking control of your own protection needs and having your own cover means you have peace of mind that your family are financially secure no matter what path you take.

4. I Used to Smoke so I’ll Wind up Paying More

If you currently smoke you may find yourself paying twice as much for life insurance than non-smokers. However, with most insurers, if you have been tobacco free for a period of 12 months or more you’ll be classed as a non-smoker. While it’s important to be honest with your insurer about smoking habits, even if you consider yourself to be “just a social smoker,” a past history of tobacco use does not mean you’re sentenced to a lifetime of higher premiums.

5. I Only Need Life Insurance if I’m Planning on Starting a Family Someday

For most people the times in their life when they are most likely to take out life insurance is when they are about to purchase a home or considering starting a family. If neither of these seem like things you’re planning on doing, you may find yourself thinking that life insurance isn’t something you need. Think again!

Should the worst happen any medical bills, funeral costs, or personal debts you built up may have to be covered by your parents, wider family, or the executor of your will. Having cover in place will help prevent your family from being left with any additional burden should you die at a young age.

Still confused about the different types of cover that are available? Find out more here.