Tips: Insurance Misconceptions and its Predicaments

• Busted! 9 insurance misconceptions that could be costing you (and how to fix it);

Are you conflicted about whether insurance is a maze of confusing terms designed to trip you up, or a safety net to protect you from life’s unexpected events?  The truth is, many people have misconceptions about insurance.

Imagine facing a major setback, a flood damaging your home or a sudden illness leaving you with medical bills. Wouldn’t it be a relief to know you have a financial safety net in place to help you recover?

We’ll look into 9 common insurance misconceptions and shed light on the power of having the right coverage with practical tips.  We’ll explore how insurance can be a valuable tool for both your personal and business life, helping you navigate challenges and get back on your feet faster.

Now, let’s dive in to understand how insurance can work for you and by the end, we hope you’ll have the knowledge and confidence to explore insurance options and find a plan that fits your needs.

1. Insurance isn’t a real product.

Imagine insurance as a product that goes through several stages before it is sold, just like buying anything else.

• Stage 1:Insurance companies or intermediaries like Equity Bank (banks that sell insurance products on behalf of underwriters are called intermediaries) sign solutions based on specific needs. For example, Equity recognizes the financial strain of a house fire and work with insurance companies to create homeowner’s insurance policies that cover rebuilding costs, lost belongings, and even temporary housing.
• Stage 2:Once the insurance product is developed, the solution is explained to potential customers. With Equity, they’ll sit down with you and explain different policy options as they onboard you, like liability coverage versus comprehensive coverage for car insurance. They’ll delve into the details of each option, ensuring you understand what each covers and how it can benefit you in different situations.
• Stage 3:At this stage, a customer is interested in a specific solution and proceeds to the contract. Luckily, gone are the days of confusing legalese. Equity simplifies policy documents, using clear language and avoiding technical jargon. They also provide a simplified risk note alongside the policy document. This note acts as a quick reference guide, summarizing key points like coverage details, exclusions, and claim procedures in plain English.  This transparency empowers you to understand exactly what you’re covered for before you sign on the dotted line.
• Stage 4:Customers pay premiums based on the chosen policy and Equity offers flexible payment options to make insurance accessible for everyone, so you’re not hit with a large upfront cost.

Insurance shouldn’t be a financial burden and there’s a variety of payment plans, including installment payments, to make insurance accessible. You can choose a payment plan that fits your budget, ensuring you’re always protected.

• Stage 5:Here’s where your selected insurance policy is activated and you receive the service. If it’s health insurance, you receive a card and in the case that a covered event occurs (e.g., accident, illness), you receive benefits as outlined in the policy.

Or say your car gets damaged in an accident. With comprehensive car insurance from Equity, the insurance company would cover repair or replacement costs, depending on the policy details.

2. Insurance is too expensive and not worth it.

The cost of insurance depends on a few factors:

Who Sells It? Always choose a provider with your best interests at heart. They act as your advocate, ensuring you don’t pay for unnecessary extras. They’ll recommend policies that provide the coverage you need without unnecessary extras that inflate the premium. Equity prioritizes finding the right coverage at a competitive rate and works to keep it affordable for you.

What are your needs? Tailoring a policy to your specific needs ensures you don’t pay for unnecessary coverage. Let’s say you’re a young driver with a new car. Equity Bank can help you find an insurance policy that covers the car’s value while considering your good driving record, potentially lowering your premium.

While insurance premiums might 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.  Imagine the financial and emotional stress of a major setback without insurance!

3. Insurance companies always find a way to deny claims.

While some might have concerns about claim denials, there is a clear path to upholding a fair claims process. Claims are payable and can be processed in good time!

For a fair process, the policy details must be explained clearly to avoid misunderstandings such as highlighting exclusions in the policy so that you know exactly what’s covered.

Equity goes beyond just explaining policy details. Their representatives proactively highlight exclusions in the policy during the onboarding process.  For example, they’ll explain that damage caused by intentional acts or natural disasters might require separate flood or earthquake insurance. This upfront communication avoids misunderstandings and ensures you know exactly what’s covered should you need to file a claim.

In addition to this, Equity conducts thorough research before partnering with any insurance company, ensuring they have a history of honouring claims.  As an intermediary, Equity has service level agreements (SLAs) with partners to ensure timely claim settlements. These agreements outline specific timeframes for claim processing, holding insurance companies accountable for prompt payouts.

You will be guided through the process, ensuring you have the necessary documentation for your claim, like police reports or medical records, expediting the process to ensure a smooth resolution.

4. I’m young and healthy, do I really need insurance?

Not all of life’s surprises are good and an accident or illness can strike anyone, anytime – even when in good health. With health insurance, you won’t be left with a mountain of medical bills.

The younger and healthier you are, the better, because starting young often leads to lower premiums due to lower risk factors. It’s like a reward!  This is your chance to bag a great rate and potentially save thousands or millions down the road.

Early coverage can also establish a foundation for future health needs. As you age, healthcare needs often increase. Having an existing health insurance policy can ensure you’re covered for potential future medical conditions.

In some cases, like car insurance, coverage is mandatory by law. Even if you’re a young, safe driver, driving without insurance can lead to fines and penalties.

You also wouldn’t mind the peace of mind that comes with knowing you’re always protected when enjoying the thrill of extreme sports, would you? Just imagine, insurance coverage tailored to your adventurous lifestyle!

5. My employer’s health insurance is enough.

We all love a good workplace benefit, but is your employer’s health insurance enough to truly protect you?

Many employer plans have coverage caps.  This means they’ll only cover medical bills up to a certain amount.  If you have a major medical condition, you could be left owing a significant amount out of pocket.

While employer-provided health insurance is valuable, it may not cover all personal or family needs, especially in situations like job losses or terminal illness. Supplementing with additional coverage ensures continuous protection for long-term healthcare needs and if you have a family, a separate health insurance plan can ensure your entire family is protected.

6. I heard that filing a claim will raise my premiums, is it true?

Contrary to common belief, filing a claim doesn’t necessarily result in higher premiums and Equity Bank Insurance shields customers from individual rate hikes by negotiating on behalf of policyholders under collective schemes.

There’s strength in numbers and Equity Bank leverages its large customer base to negotiate with insurance companies. By representing a significant pool of policyholders, they negotiate lower premiums for everyone under the scheme. This bargaining power ensures that when you’re insured through Equity and you file a claim, your premium increase might be lower than if you obtained insurance directly from the insurance company.

Equity also considers your claim history in the negotiations and will shield you from shocks of variation of premiums and if needed, helps you compare rates from different insurers to find the best coverage at the most competitive price.

There are also risk management tools and resources to help you identify and mitigate potential risks. For example, if you insure your business, they might suggest installing a security system or recommending steps to prevent fires or water damage. By taking steps to reduce risks, you can potentially avoid future claims altogether, keeping your premiums stable.

Here are some tips to stay in control of your premiums:

• Know your car’s value and track service charges:Ensure you’re not overpaying for car insurance. Be informed about your car’s current market value to avoid being charged incorrectly and review your bills closely. If you see charges for services you haven’t received, you have the right to request a credit note or refund.
• Review your coverage:Make sure your policy covers everything you need. Consider adding riders (amendments) for specific situations like critical illness to avoid gaps in your coverage.

7. Insurance is made complex to confuse customers

Sometimes it feels like legalese was designed to confuse rather than inform but Equity understands that this complexity can be a barrier and has ditched the technical jargon and its insurance policies are written in clear, concise English that’s easy to understand.

Beyond the standard policy document, Equity provides a simplified risk note written in plain language. This one-page summary highlights key coverage details, exclusions, deductibles, and claim procedures, and is a quick and easy reference guide you can always refer to.

If English is not be a customer’s primary language, Equity’s branch network is staffed with qualified insurance professionals who answer questions, explain the policy in detail, and break down any confusing elements in the customer’s preferred language or mother tongue.

An additional resource available, is a comprehensive list of FAQs written in plain language to address common questions and concerns about various insurance products so you can navigate the world of insurance with confidence.

8. Life insurance only benefits my beneficiaries, not me.

Life insurance is more than just a safety net for your loved ones – it’s a powerful financial tool that can benefit you throughout your life.

Depending on the policy you choose, the premiums you pay might be partially tax-deductible. This can translate to significant tax savings each year, potentially lowering your overall tax burden and freeing up extra cash for other goals.

Some life insurance plans, accumulate cash value over time, growing tax-deferred. This accumulated cash value becomes a valuable financial asset you can tap into during your lifetime. Need funds for a child’s education, a down payment on a house, or even to supplement your retirement income, you can turn to your Equity life insurance plan to cover what matters most.

The cash value in your life insurance policy can also serve as collateral for a loan. Think of it like using your life insurance as a security deposit. This can potentially help you secure a loan at a competitive interest rate because lenders see the cash value as a safety net if you’re unable to repay the loan.

Of course, the core purpose of life insurance remains providing financial security for your loved ones after you’re gone. A life insurance payout can help cover expenses like funeral costs, outstanding debts, or even mortgage payments. This ensures your family isn’t left financially burdened during an already difficult time. It’s an investment in your future and the future of those who matter most.

9. It takes too long to file a claim, insurance frustrates the process.

A loss can be stressful and the last thing you need is a complicated claims process adding to your burden. Here’s how Equity ensures a smooth and efficient claims process:

• Right from onboarding, they explain the claims process in detail, set realistic expectations about timelines and outline the required documents upfront. This transparency ensures you know exactly what to expect and what steps to take.
• We leverage technology to simplify the process. Claims can be filed and documents submitted electronically at your nearest Equity Bank branch. No more waiting for hard copies to be transported across the country!
• If a cheque is issued, you don’t need to worry about long waits or multiple signatures. Equity can help you deposit the cheque directly into your account at any Equity Bank branch, saving you time.
• Equity partners with reputable insurance companies and hold them accountable. We have clear SLAs outlining expected claim turnaround times. These agreements ensure your claims are processed and settled promptly, minimizing delays.
• Customers are updated regularly on the progress of the claim and can be confident that Equity is in their corner to ensure a smooth claims process.

Equipping yourself with the right knowledge is the first step to unlocking the true potential of insurance. Don’t wait until it’s too late.  Call 0763 000 000 for enquiries or visit your nearest Equity Bank branch to start building a secure future for you and your loved ones.

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