Life insurance can be difﬁcult to understand. It’s often that ﬁrst question— Do I really need life insurance?— that can be the most confusing. Chances are, you do need a policy. Accidents happen, and providing your loved ones with some peace of mind can help ease their burden.
Here are four common myths keeping New Zealanders from addressing their life insurance needs:
- I’m single and have no children, so I don’t need coverage.
Even if you’re single with no dependent children, having life insurance could still a good idea. If you owe money together with a family member, say on a car loan or mortgage, a life insurance policy naming that person as a beneficiary could give them enough funds to pay off these expenses if you were to suffer an untimely death. Policies are also available that will cover funeral expenses, leaving your loved ones with one less thing to worry about.
- Only the primary breadwinner needs to be insured.
If you’re part of a dual income household, then coverage for yourself and your partner could be important, especially if you rely on both incomes to meet your ﬁnancial obligations. However, covering the loss of a stay-at-home partner may also make sense. Consider all the ‘services’ a homemaker provides: childcare, shopping, cooking, housekeeping, transportation… Hiring someone to cover even half of these tasks would be expensive! An insurance policy can help cover the cost of hired help, especially when it comes to childcare and other high cost services.
- I bought a policy years ago, so I’m covered!
As your life changes, your insurance needs also change. A policy taken out in your twenties may no longer match your financial situation. If you’ve gotten married, had children, or purchased a home since buying your policy, you may need to increase the cover amount. The cost of your current policy may no longer fit your budget, either. Switching insurance providers may decrease your premiums whilst providing extras not included in your current policy.
- I can’t afford life insurance, it’s too expensive.
A recent report found that New Zealanders mistakenly believe that life insurance premiums cost too much.1 However, some policies can cost as little as $6.50 per week, based on factors such as your gender, age and smoking status.2
Disclaimer: Product information is accurate at the time the article is published. For current product details, please visit the Momentum Life website.
1. Massey University, Exploring Underinsurance within New Zealand.
2. Momentum Life. Based on a female non-smoker, aged 34.