Life insurance can be difficult to understand, but accidents do happen unfortunately. And life insurance is designed to pay a benefit to loved ones if the unexpected does occur.
Here are four common myths keeping New Zealanders from taking care of their life insurance needs:
1. I’m single and have no children, so I don’t need cover.
Even if you’re single with no dependent children, when you pass away, your debts unfortunately don’t disappear. Financial obligations such as a car payment, mortgage, student loans or even credit card debt, could be passed to a parent, spouse or other next-of-kin. A life insurance policy could give your family money to pay off these expenses if you were to die unexpectedly.
2. I’m a stay-at-home parent or work part-time—it’s not worth it to get covered.
Covering a stay-at-home parent may also make sense to a family. There are all the ‘services’ a homemaker provides to think about: childcare, shopping, cooking, housekeeping, transportation… Hiring someone to cover even half of these tasks would be expensive! An insurance policy could help cover the cost of hired help, especially when it comes to childcare.
3. I bought a policy years ago, so I’m covered!
A policy taken out in your twenties might no longer match your financial situation. If you’ve gotten married, had children, or purchased a home since buying your policy, your needs may be different. On the other hand, if you’ve paid off the mortgage and other large debts, you may also want to review your cover.
4. I can’t afford life insurance, it’s too expensive.
A recent report found that nearly 40% of Kiwis haven’t taken out life insurance because they cannot afford the premiums1. With a lot of policies on the market, a little bit of shopping around may help you find something that suits your needs and budget.
A version of this article was first published on 5 July 2017. It has been updated to reflect more current stats and Momentum Life products.
1. Financial Services Council, Risking Everything: Insight into how New Zealanders manage risk, June 2019
About Author: Momentum Life is a leading provider of Life insurance and Funeral insurance in New Zealand.
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The content provided in this article is for information purposes only. The information is of a general nature and does not constitute financial advice or other professional advice. To the extent that any of the content constitutes financial advice, it is limited to Momentum Life products only and does not consider your specific financial needs or goals. You should consider whether the information is appropriate for you and seek independent professional advice, if required.
All product information is correct at the time this article was published. For current product information, please visit the Momentum Life website.
