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We often fear things we do not understand and life insurance is no different.
The idea of sharing personal information, the use of complicated terms, mandatory medical tests, costs, and uncertainty about whether a claim will be paid can be paralysing.
However, Steph Bester, CEO at AllLife, says it is time to remove some of these fears and provide solutions to ensure you are confident when taking this important step to insure your life as it really is an important decision you need to consider for yourself and your loved ones.
He put together a quick checklist to help consumers face these fears armed with facts that includes the necessary step of getting personal, dealing with the jargon, redefining the process, getting cover you can afford, dealing with doubts about claim payouts and taking back control.
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When you apply for life insurance you are required to share sensitive personal and medical information. “We know that discussing your weight, medical issues you may have, or a family history of illness can be uncomfortable and when it comes with the possibility of rejection after sharing these details, it can discourage any one of us,” Bester says.
“In many cases, many of us do not believe we even qualify because we may have gained some weight in recent years or are suffering from a chronic disease like HIV, diabetes, cancer, hypertension, a heart condition, anxiety and depression.”
To be asked about your family history at the same time can open old wounds and nobody wants to relive the loss of a loved one that was already difficult to deal with.
Bester says the solution would be to find a private, comfortable spot when going through the insurance application process. While honesty is essential as it ensures accurate coverage, you probably do not want to go through this process over the phone where others may hear your conversation.
Insurance is known for its intimidating big words and complex phrases, such as ‘whole of life’, ‘cessions’, ‘insurable interest’ and ‘elimination period’. Bester says this can be overwhelming and confusing as not everyone has a lawyer, actuary or financial expert in the family to call on to help cut through this confusion.
He suggests that when you do not understand a term, you ask the consultant to explain it.
“You are not alone in the jargon jungle. We do not all understand insurance terminology and it is the insurer’s responsibility to help you understand what these words mean. Remember, you are the customer and you do not have to rush through this process. Take your time.”
In addition, always look for an insurer that supports you through the application stage and whose partners are experienced in handling sensitive issues. Bester says all his company’s policy documents are already written in simple language and include a definitions table to help consumers understand complex terms.
“This support should not end when you sign a policy. A good partner will continue providing support, answering any lingering questions and providing reminders to regularly check up on your health.”
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Mandatory medical tests and procedures is another fear that can discourage us from getting insurance, Bester points out. “I do not know anyone who enjoys having blood tests, hospitals, or needles but this should not stop you from securing your family’s financial future.”
He says the solution will be to opt for what insurance world call “Simplified Underwriting”. Without adding to the jargon headache, this means that you can answer questions about your health and lifestyle. “Depending on your health, there may not be a need for further medical tests and you can still get life insurance up to a certain level.”
It is very tempting to add all the bells and whistles to your life insurance but it can make your life cover more expensive. Bester says you must think of it like customising a new car where costs increase when you add extras like mag wheels, a bulbar, sunroof, or a metallic colour. The same applies to life insurance: the options sound amazing but they are going to inflate the cost.
Bester’s solution is to ask for options that will suit your needs and your budget. “Remember you have the power here because you are the client and there is never only one option! If you are on a tight budget.
“Consider a lower cover amount, or alternatives such as accidental death cover and funeral cover as a bare minimum. If your premium is getting too high, call your insurer and ask them to adjust your policy based on what you can afford.”
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None of us wants to pay for life insurance only to have a claim rejected but it is a very real and valid fear, although it can be addressed with transparency and open communications, Bester says.
The solution would be to be bold and ask your insurer upfront for a list of reasons that a claim may be rejected. “Some common reasons are unpaid monthly premiums, failure to disclose full health information or pre-existing conditions, waiting periods, not fulfilling your health monitoring commitments, or claiming for coverage you do not have, such as a disability.”
Bester says you can take back control of your financial destiny and it starts by helping you tackle the fears we all face when applying for life insurance.
“It is important to know that you have a lot more control and choice than you believe. To me, life insurance is not a luxury, it is a gift you give your loved ones, offering financial security, affording them the future you have in mind and access to the important things in life.”
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