Debunked: 9 leading insurance myths that you should not believe in

Confused about whether insurance is a labyrinth of perplexing terms or a safety net for life's unexpected events?

Many harbour misconceptions about insurance.

Facing a major setback, such as a flood damaging your home or a sudden illness leaving you with hefty medical bills, wouldn't it be reassuring to know you have a financial safety net to help you recover?

We examine nine common insurance misconceptions and illuminate the benefits of having the right coverage with practical advice.

By exploring how insurance can be a valuable tool for both personal and business life, we aim to help you navigate challenges and recover faster.

1. Insurance Isn’t a Real Product

Consider insurance as a product undergoing several stages before being sold, much like anything else.

Stage 1: Insurance companies or intermediaries, like Equity Bank, create solutions based on specific needs.

For instance, Equity collaborates with insurance companies to offer homeowner's insurance policies that cover rebuilding costs, lost belongings, and temporary housing.

Stage 2: The insurance product is explained to potential customers.

Equity’s representatives provide detailed explanations of policy options during onboarding, ensuring you understand the benefits of each.

Stage 3: Interested customers proceed to contract. Equity simplifies policy documents, avoiding technical jargon and providing a risk note summarising key points like coverage details and claim procedures.

Stage 4: Customers pay premiums based on their chosen policy.

Equity offers flexible payment options, making insurance accessible without a significant upfront cost.

Stage 5: The policy is activated, and service is received. In case of a covered event, such as an accident or illness, benefits are provided as outlined in the policy.

2. Insurance Is Too Expensive and Not Worth It

Insurance costs vary based on several factors, and choosing a provider with your best interests at heart is crucial.

They act as your advocate, ensuring you don’t pay for unnecessary extras.

Equity Bank prioritises finding the right coverage at a competitive rate and works to keep it affordable.

Tailoring a policy to your specific needs ensures you don’t pay for unnecessary coverage.

While premiums may seem like an additional expense, they are an investment in your financial security.

The value of being protected from unforeseen events far outweighs the cost of the premium.

3. Insurance Companies Always Find a Way to Deny Claims

Concerns about claim denials can be mitigated by ensuring a fair claims process. Policy details must be explained clearly to avoid misunderstandings.

Equity highlights exclusions in the policy during onboarding, ensuring you know exactly what's covered.

Thorough research is conducted before partnering with any insurance company to ensure they have a history of honouring claims.

Equity’s service level agreements with partners ensure timely claim settlements, providing transparency and accountability.

4. I'm Young and Healthy, Do I Really Need Insurance?

Accidents or illnesses can strike anyone at any time.

Health insurance prevents you from being burdened with medical bills.

Starting young often leads to lower premiums due to lower risk factors.

Early coverage establishes a foundation for future health needs.

Some insurance, like car insurance, is mandatory by law.

Insurance provides peace of mind, ensuring protection even during adventurous activities.

5. My Employer's Health Insurance Is Enough

Employer-provided health insurance may have coverage caps, leaving you with significant out-of-pocket expenses for major medical conditions.

Supplementing with additional coverage ensures continuous protection for long-term healthcare needs.

Separate health insurance plans can ensure your entire family is protected, especially during job losses or terminal illnesses.

6. Filing a Claim Will Raise My Premiums

Filing a claim doesn’t necessarily result in higher premiums.

Equity Bank shields customers from individual rate hikes by negotiating on behalf of policyholders under collective schemes.

By representing a large pool of policyholders, Equity negotiates lower premiums.

Risk management tools help mitigate potential risks, potentially avoiding future claims and keeping premiums stable.

7. Insurance Is Made Complex to Confuse Customers

Equity simplifies insurance policies by avoiding technical jargon and providing clear, concise language.

A simplified risk note summarises key coverage details, exclusions, and claim procedures.

Equity’s branch network offers assistance in multiple languages, ensuring customers understand their policies.

8. Life Insurance Only Benefits My Beneficiaries

Life insurance is a financial tool that benefits you throughout your life.

Premiums might be partially tax-deductible, offering tax savings.

Some life insurance plans accumulate cash value over time, providing financial assets for future needs.

Life insurance payouts cover expenses like funeral costs and outstanding debts, ensuring your family isn’t financially burdened.

9. Filing a Claim Is a Complicated Process

Equity ensures a smooth claims process by explaining it in detail, setting realistic expectations, and outlining required documents upfront.

Technology simplifies claims filing and document submission.

Equity partners with reputable insurance companies, holding them accountable for prompt claim settlements.

Regular updates on claim progress provide confidence in a smooth process.

Understanding these misconceptions is crucial in harnessing the full potential of insurance.

By addressing these myths, Equity Bank aims to empower individuals and businesses alike, making insurance a reliable ally in safeguarding financial well-being.