4 myths you should know about life insurance

You're young and full of positivity about the future, but here's the thing - unexpected events and accidents could happen to anyone at any time and it's important to be prepared. Essentially, life insurance allows the financial consequences arising from the unexpected to be taken off your shoulders and minimises the financial tumult on your family as well. Accidents could adversely affect your ability to work and your income stream, so if you don't have the right coverage in place, there may be a blow to the quality of life you and your parents are used to having. 

You may not be the main breadwinner of the family, but an accident could still negatively impact your overall household income. Even if your only contribution is cleaning the house or preparing meals, that's still value you bring to the family. If you can't help out with the household chores, your parents may need to hire a domestic helper and that creates extra financial cost. This is why you should always plan for a rainy day, and prepare for the unexpected.

Additionally, when you're deciding on life insurance, your first consideration should be how much protection coverage you'll need, not how much you'd want to pay. Talk to an insurance advisor to customise a coverage plan that's suitable and reasonable for your current life stage, budget and your ultimate life goals.  

With term life policies, premiums are determined based on your age, health status, as well as other factors. Generally, the younger you are, the lower the premiums you'll have to pay, so it's better to get insurance coverage while you're still young. And instead of making monthly payments, you could consider choosing the annual premium option as that usually means the total premium you'd have to pay will be lower.

First of all, even if you already have investments such as stocks and bonds, it's still a good idea to manage your risk by diversifying your investment portfolio. Generally, the risk associated with investment-focused life insurance policies is lower than risk levels generated by investment products. Some coverage policies may also offer cash bonuses and dividends, so they may be a good way to balance out risk exposure and diversify your investment portfolio.

Secondly, just relying on investments may not be enough to generate a stable income for you and your family. When it comes to investing, a higher yield usually means higher risk. If you unfortunately and unexpectedly pass away without protection from a life insurance policy, the absence of a stable income stream might put your family in financial jeopardy.

Generally speaking, life insurance policies carry fewer exclusions than other types of insurance. As a result, there are usually fewer claim disputes. However, it's important to pay attention to the scope of coverage and exclusions in your policy provisions. You'll also have to declare any existing health issues you may have in order to reduce the chances of your claims getting rejected.

If you've just started your career, it's normal to be focusing your job and getting ahead. But it's equally important not to forget to plan for your future. The right coverage can protect you from life's unexpected events. You can find out more by checking out our LIFE Talk series, which has videos and useful information on how different insurance products can offer you the coverage that's just right for you.