New research from Gocompare.com suggests that
when it comes to life, consumers find it very difficult to tell the difference
between fact and fiction.
- 44% believe that life insurance policies do not
pay out for suicide and 18 % believe e that if they die their credit card debts
die with them
- 18 % believe that if they die their credit card
debts die with them.
If you die owing money on your credit cards, your
estate will have to repay your credit card debts before any assets can be
passed on to your beneficiaries. As long as you have no assets such as a house,
your credit card provider cannot pursue anyone else for your individual credit
card debts.
- 44% believe that life insurance policies do not
pay out for suicide
Whether a policy pays out in the case of suicide
differs between insurers. Often suicide is covered after the policy has been in
force for at least one year, but individual policies may vary.
- 44 % believe they should tell their life
insurer if they start smoking
- 23 % think they should tell their life insurer
if they put on a lot of weight
- 48 % believe they should tell their life
insurer if they get a serious illness
- 44 % believe they should tell their life
insurer if they take up a dangerous sport
- 23 % believe they should tell their life
insurer if they change their occupation
All myths - when you take out life insurance the
insurance company assesses your risk based on your health, lifestyle,
occupation and whether you participate in any dangerous sports or pastimes at
that time. The premium quoted by the insurer will reflect your circumstances at
the time you apply for cover. As long as you answer all of the questions
accurately and honestly during your application you do not need to inform the
insurer of any unforeseen changes that may happen in the future. Changes to
your lifestyle will not affect your premium or your chances of your
beneficiaries making a successful claim.
But, dangerous sports may be excluded from the
policy.
- 42 % think they should inform their life
insurer if they give up smoking
Fact - some insurers are prepared to review and
possibly lower your premium should you stop smoking. If they will not, and you
have given up smoking for 12 months or more, you could consider shopping around
for a new policy so that your premium can be calculated as a non-smoker. Always
make sure you have cover in place before cancelling your old policy.
- 19 % think they should tell their insurer if
they lose lots of weight
Myth - but you should review your cover - your
insurer will not reduce your premium but if you have lost lots of weight it may
be a good time to review your cover. Your insurance company will have
calculated your premium based on your circumstances at the time of your
application so if you were dangerously overweight your premium may have been
higher than normal to reflect the potential hazard to your health. If you lose
a lot of weight and become healthier you may find that insurers are willing to
offer you more favourable terms on a new policy, even if you are a little
older, so shop around to make sure you get the best deal for the new, fitter
you.
- 35% believe they should tell their insurer if
they give up a dangerous sport
Myth - but you should review your cover - in most
cases an insurer would need a new application to take account of your changed
circumstances and is unlikely to reduce your premiums just because you tell
them you have given up rock climbing.
Jeremy Cryer of Gocompare.com says, "Many
consumers are pretty baffled about what affects their life insurance and what
happens to their debts when they die. No one likes to think about what will
happen when they die, but you owe it to those you leave behind to ensure they
are not left in a financial mess when they are trying to pick up the pieces
after your death."
Life insurance news: 29 December 2011
