Insurance Myths

[Angio333]

Hello,

I am currently a licensed agent, but not actively working in the field. Right now, I am working to become an EMS instructor at work. We have to give a few lectures on non-work related topics. I was thinking about doing one on insurance myths.

What are some of the biggest insurance myths that you have come accross?

The first one I am think of is suicide. If I remember my insurance class correctly, suicide is often covered after two years. Most people think that suicide is never covered. Am I right about this one?

Thanks in advance.

 

[HomeService]

suicide may be different from state to state. I saw something about missouri and proving intent or knowing about the suicide intent upon application.

I think the biggest myth is that term life is always best!! ha ha { we have had several discussions on this}

I also think the other big myth is that everything is always covered 100% on health ins. people litterally think this.

The other health myth: "whoops, I'm coming down with something- I better go out and buy insurance to cover it."

I litterally had a guy call me one time to tell me he needed health insurance to cover all his psychiatric visits every week. They cost him like $90 a session, every week! Or it was some sort of mental rehab, or a visit to get his prozac or something- I don't know.

 

[Crabcake Johnny]

Great one - that would be the biggie - that you can pick up a plan and run off to see a doctor.

 

[xosephchu]

Another controversial subject in insurance community is whether a child needs life insurance. There are 2 opposing views each with valid reasons

 

[xrac]

One of the biggest myths is that buy term life insurance and invest the difference is ALWAYS the best strategy.

 

[Newby]

Here is my opinion of the biggest incorrect myths:

1. Everyone should only buy whole-life

2. Everyone should only buy term

3. Everyone should only buy whole-life

4. Everyone should only buy term

Oh ya, there is one more...

5. Whole-life means payments for life...yikes! Even agents often get that one wrong. New agents anyway.

 

[HomeService]

I have been around 22 years and never once heard any client question if it's correct to have life insurance on a child. Where is this coming from? I never heard it. Of course, I almost always sell whole life to the parents of the kids, so there's the savings aspect, there. I could see the questioning of putting like 250K term on a kid, I could see that...

 

[Guest]

Another controversial subject in insurance community is whether a child needs life insurance. There are 2 opposing views each with valid reasons

What's the controversy? If a child dies, the parents will experience a financial loss.
Maybe the amount of the policy is the controversy?

 

[xosephchu]

Personally, I am not against the idea of getting life insurance for children.

Some financial planners or insurance agents hold different views. One of the reasons mentioned is that insurance should focus on the parents or the family breadwinners since generally a child does not contribute income to family and as such there is no major income loss to the family if the child is out of the picture.

 

[djs]

Hmm, the controversy looms....

There are some expenses if a child dies, I don't think anyone objects to this. My point to the parents is they will probably take some time off work as well, and need to cover this loss of income.

Add in the fact it's the best time to buy some permanent insurance for a person, while there is no medical issues.

Now, cap it at about $100,000, not exceeding the amount the parents have (there are reasons to have more than this, but they are a bit rare).

Gerber makes a business out of selling these policies.