Part 1 – Mythbusting common insurance misconceptions

Do you know what's fact and what's fiction around insurance?

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A myth – a widely held, but false belief or idea.

If you're anything like us at Money Empire, you're struggling to find the truth amongst all the fake news that's out in the world. However, that doesn't mean that it's not possible!

Take insurance as a great example. Most people believe it's an important element of their lives, but there are countless myths that continue to undermine the sector as a whole. In Part 1 of our series on the top insurance misconceptions, we went mythbusting with Registered Financial Adviser Goran Loncar

Myth 1 – Insurance isn't worth the cost

Talk to some people and insurance is the big bad wolf – stay away at all costs. However, when something unexpected happens in your life, knowing that insurance has your back is significant both financially and emotionally.

Having insurance means you're prepared for the unexpected.Having insurance means you're prepared for the unexpected.

"Medical advancements, for example, are improving by the year so it's more likely that you'll survive injuries and diseases. As a result, having insurance can ensure debt doesn't grow during recovery and cover any costs you encounter," Goran said.

Myth 2 – I can't afford life insurance on my current salary

Don't think that insurance can fit into your budget? Think again! As Goran explains "some insurance is better than no insurance". 

While it depends on your age and stage of life, there are many insurance options available that can match your salary – even if that is minimum wage. Goran said that it's best to shop around for the best deal that suits your situation.

Myth 3 – Home insurance covers all my belongings in my house

The devil is in the wording here. Home insurance only covers any sudden or unexpected accidental damage to the house – not the belongings inside. To cover damage in this way, you'll need contents insurance.

Contents covers your belongings inside, not home insurance.Contents covers your belongings inside, not home insurance.

Myth 4 – Older homes are cheaper to insure

"This is actually the other way around," Goran remarked. Homes built prior to 1945 were subject to different building practices and standards and are therefore considered more high risk than modern structures. 

Insurance providers will analyse the age of the home and look at what improvements have been done to ensure it's up to modern legislation. If it isn't, it could be costly to insure.

Stay tuned for Part 2 of our mythbusting series as we look deeper into some of the top insurance misconceptions. If you have any pressing questions about insurance in the meantime, get in touch with the expert team at Money Empire.

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