Myths still swirl around insurance. Whether they come from a relative who didn’t get their claim settled, or from sensational headlines in the press, most of these myths usually stem from a poorly chosen policy or a lack of understanding of one’s needs. Today, I want to debunk a few of these myths, which might help clear up any doubts you have.
Myth 1: A Life Insurance Policy Lasts for Your Entire Life
This myth likely stems from the fact that, in the past, the most popular policies were permanent, meaning they lasted for the insured’s entire life. Breaking these policies could result in penalties or loss of accumulated funds. However, those days are long gone, and such policies no longer exist due to financial regulations and changes in the law.
Nowadays, there are different types of life insurance policies:
- Permanent life insurance policies might have higher initial costs due to a smaller saved amount versus the risk covered. However, you can cancel these policies at any time.
- Life and endowment insurance policies guarantee a payout in case of the insured's death, but also pay out a specified amount if the insured reaches a certain age.
- Term life insurance policies typically last as long as, for example, a loan, to protect the family in case of the borrower’s death.
- Savings insurance policies like IKE or IKZE, often linked to retirement savings.
You can cancel any life insurance policy at any time. There may be costs involved, but these are clearly described, for instance, in the surrender table or in the general terms of the insurance and are solely related to the insurance risk.
Myth 2: Mandatory Car Insurance is a Scam
This myth also arose primarily from rumors and poor journalism. Car liability insurance (OC) is the most important protection against financial consequences in case of causing damage. Most misunderstandings arise from poorly written statements, changes in testimonies after reporting a claim, or incorrect data. With a well-written policy and properly handled claims process, you don’t have to worry about paying for damages out of your own pocket.
Here are a few examples to illustrate this:
- You hit a cyclist while driving, and a costly surgery is required. If no laws were broken (e.g., driving under the influence, fleeing the scene), the entire cost of treatment is covered by OC.
- You collide with a luxury car at an intersection—it’s your fault. The repair costs amount to hundreds of thousands. Everything is covered by OC.
It’s worth spending a few hundred złoty a year on a policy and driving with peace of mind. Additionally, if you have an expensive car or simply want full protection, it’s worth exploring optional car insurance products like AutoCasco.
Myth 3: Life Insurance Only "Protects" When You’re Healthy
The coverage of life insurance can be either very narrow or very broad. Its operation is STRICTLY linked to factors such as:
- The insured person’s health condition,
- The chosen sums insured,
- Whether any crucial health information was hidden before the policy took effect,
- Selected additional agreements (e.g., for accidents, child insurance),
- Exclusions specific to the insurance company.
Purchasing a life insurance policy should be a well-thought-out decision, and an insurance agent can help by thoroughly analyzing your needs. The result will be the best insurance offer that allows you to sleep soundly.
Myth 4: All Insurance Policies Have Exclusions to Avoid Paying Claims
Contrary to what one might think, exclusions are meant to HELP you, not hinder you. Insurance operates on a simple risk transfer mechanism. If 1,000 people pay for insurance and 5 of them have accidents, the premiums collected from everyone are used to pay the claims. This system spreads the risk over more than one party.
Now, imagine that 10 of these people cheat and wrongfully receive compensation. Why should your insurance costs increase because of someone else’s dishonesty?
If a person enters into an insurance agreement without hiding the truth and after a thorough needs analysis, they won’t need to worry about exclusions or lack of coverage.
Myth 5: The Cheaper the Insurance, the Better
Sometimes, insurance companies offering much lower premiums enter the market, convincing you that it’s worth buying insurance from them. However, problems arise when a claim needs to be settled. Suddenly, it turns out that the company is, for example, insolvent, there are issues with paying out claims, and court cases begin. Such a case involved the company Gefion, which offered very cheap OC, but victims had a huge problem obtaining compensation. Ultimately, the company went bankrupt.
Myth 6: Buying Insurance is Complicated
Here, I have to say—it depends. Nowadays, if you need insurance, you can get it almost anywhere, but the best policy is one that is well-thought-out and consulted, especially when it involves something like life protection.
If you decide to compare insurance offers on various special portals, pay close attention to exclusions, often written in small print. This might include things like your deductible in AutoCasco. While there isn’t much room for maneuvering with mandatory insurance like OC, for more serious policies, follow the rule “insurance policies are not created equal.” And when in doubt, consult an insurance agent.
Myth 7: Insurance Companies Will Do Anything to Avoid Paying
The final myth is somewhat a repetition of the previous ones. The decision on whether compensation is due depends on:
- The scope of insurance coverage,
- The type of event or damage,
- Truthfulness when entering into the policy,
- Legal aspects at the time of the claim, such as the driver’s sobriety,
- Waiting periods,
- Exclusions related to the insurance policy,
- The sum insured.
If the policy was purchased thoughtfully and in full alignment with your needs and the truth—you can be 100% sure that the benefit will be paid out.
