Life Insurance: Myths That Could Cost You

Whether you're retired, still working, or somewhere in between, understanding the truth about life insurance is crucial—for you, your partner, or your adult children. And let's face it, if something happens to your adult children and they don't have enough insurance, guess who might be required to help out? And if you’re in that younger working stage of life, this is most definitely for you. Too often, cover is overlooked until it’s too late.

Here we clear up 9 common life insurance myths, so you can make informed decisions for yourself and help protect those you love.

1. “Insurance companies don’t pay anyway.”

ü This is a common belief—but the facts say otherwise.

ü 92% of life insurance claims in Australia are paid.

As long as the application is truthful and the condition is covered, you can feel confident that the claim will be honoured.

2. “I’m young and/or healthy—I don’t need it yet.”

Many people think insurance is only for those with kids or mortgages. But what happens if you—or your adult child—gets sick or injured and can’t work Would they turn to you for help?

ü Income protection helps them stay financially independent—without putting stress on family.

ü Waiting until later in life, apart from running the risk of needing it, will likely result in loadings or exclusions being placed on your insurance that could have been avoided when you were younger and healthier.

Bonus: premiums are cheaper when you’re younger and healthier too!

3. “If my health changes, I’ll lose cover.”

Not true. Once cover is in place, it won’t change if your health does. This is why the application process involves detailed questions—so the insurer can properly assess the risk up front, knowing they’ll be on the hook for a large claim if needed.

That’s another good reason to get in early, before any unexpected health issues arise.



4. “Getting covered means tons of medical tests.”

Usually, it’s simple. Most policies only need a GP check-up and a basic blood test.

If there’s a medical history involved, more detail might be needed; however, the process is designed to obtain the right coverage, not to exclude them.

5. “Level premiums never go up.”

Level premiums reduce the impact of age-based increases, but that doesn’t mean premiums never change. Insurers can adjust premiums due to market trends and claims experience. It’s important to review policy terms regularly.

6. “I’ll be stuck paying for cover I don’t need.”

Life changes, and so should insurance.

ü You can increase coverage when you buy a house or have kids (subject to some updated health questions)

ü On the flip side, cover can be scaled back as debts are cleared or the kids move out.

A financial adviser can help adjust the policy to fit your life stage.

7. “My super fund cover is enough.”

Most people have some life insurance coverage in their super fund, but it’s usually not enough.

ü Studies show typical super policies only meet around 38% of the needs of families with children.

ü Default cover in super often has less-friendly terms than retail insurance

For full protection, many people require additional coverage beyond what is included in their super. And no, super itself should certainly not be relied on – that's meant to support you in retirement.

8. “Workers’ comp will protect me.”

Workers’ compensation only applies to workplace injuries—and nothing else. If you—or someone close to you—becomes ill or is injured outside of work, they won’t be covered. And if you’ve ever known someone who has had to go through a Workers' Compensation claim, ask them what it was like.

That’s where life, disability, and income protection insurance come in.

9. “Only the main earner needs insurance.”

If one partner in the family gets sick or injured—even if they earn less—it can deeply affect the whole family. Especially where young kids are involved, the surviving/healthy partner will likely need to cut back or quit their jobs to look after the family – Or Grandma and Grandpa become full-time carers again.

ü It’s smart for both partners to be insured, no matter their income level.

 Final Thought: A Gift That Keeps on Giving

Life insurance might not be the most exciting topic—but understanding it, or helping your loved ones grasp its value, can be one of the most meaningful gifts you give. Whether it’s setting yourself up with the right cover or guiding your children as they take on greater responsibility, it’s about more than money—it’s about peace of mind, security, and long-term freedom.

Why not forward this article to them? Or offer to connect them with us?

Start the conversation today—so they’re protected tomorrow.