5 Common Insurance Myths

Insurance can seem complicated. We’re here to help! There are many false claims floating around the internet, and it can be difficult to know what to trust. We’ve collected five common myths and misunderstood topics from Forbes, PolicyGenius, and MichiganAutoLaw and debunked them with facts for you. Let’s break them down individually.

Myth #1: “I don’t need life insurance if I am young, single, and healthy.”

Although you may be young, single, and healthy for now, insurance cannot be bought when it’s needed. Forbes states that the “Best time to purchase a life insurance policy is when you are young since the premiums are lower and you can avail a high life cover at very low premiums. If you have a student loan or a personal loan, this loan can be protected from becoming a burden to your parents due to any risk of death, disease, or disability as you grow older, your policy can also protect your family commitments, or cover your health-related and retirement expenses.”

Myth #2: “Life insurance is only useful after my death.” 

There are many reasons to invest in a quality life insurance policy while you are still alive. LiveWell explains that “One of the key reasons life insurance is important while alive is its ability to provide financial security and stability. Life is unpredictable, and unexpected events such as disability, critical illness, or job loss can jeopardize your financial situation. Life insurance policies with living benefits or riders can provide a safety net during challenging times, offering financial support, and helping meet day-to-day expenses.”

Myth #3: “I can’t receive auto insurance because I have a bad credit score.” 

In several states across the US, including Michigan, this statement is false. According to MichiganAutoLaw, “A Michigan auto insurance company cannot use a person’s credit score to refuse coverage or refuse to renew existing coverage.” Credit score and insurance scores are two different items. An insurance score is an indicator of the likelihood an individual will submit claims and was developed after an extensive analysis of persons who submit claims and the factors on their credit reports. Farm Bureau Advantage Discount provides a score derived from these characteristics and is available for any Named Insured who has a qualifying score. 

Myth #4: “I don’t need homeowner’s insurance; I can make the repairs myself.” 

Even if you are a very skilled trades person, DIY-er, or have experience with house building, it is a huge risk to expect that you will be able to pay out of pocket for every costly house incident that comes your way. The cost of Homeowner’s insurance is far less expensive than rebuilding a home and the cost includes coverages like liability, loss of use, and more. Homeowner’s insurance gives you peace of mind knowing that your house and its belongings are covered. 

Myth #5: “I am not eligible for insurance because I am too old/I have a pre-existing health condition.”

According to the US Department of Health and Human Services, “Under the Affordable Care Act, health insurance companies can’t refuse to cover you or charge you more just because you have a “pre-existing condition” — that is, a health problem you had before the date that new health coverage starts.”

If you have any additional questions, please reach out to our agency at (734)-243-2630 and we will be happy to assist you!