There’s a common perception that life insurance companies will do everything they can to avoid paying claims. In fact, 92% of all life insurance claims are paid in the first instance. As long as you fulfill your duty of disclosure when you apply for cover, and you’re covered for the medical condition you’re claiming for, you can be confident your claim will be paid.

Life insurance isn’t all about providing for debts and dependents. It’s also about looking after yourself. Think what would happen if you became ill or disabled and couldn’t work. If you didn’t have income protection, you’d have to find another way to supplement your income – through friends or family. Having income protection means that you are more likely to be able to manage on your own. There are benefits to applying for life insurance when you’re young and healthy. It’s generally cheaper and it means you don’t have to worry about getting cover later if your health changes (see myth #3).

Once you start your cover, what you are covered under your life insurance for won’t change – even if your health declines. In fact, you generally don’t even need to tell your insurer about a change in your health unless you intend to make a claim.

Life insurance is designed to change as your life changes, as your cover needs can vary significantly over your lifetime. An example may be when taking out life insurance when getting married. You may want to increase your cover if you have children or increase your mortgage. But similarly, you may want to reduce your cover if your children have grown up or you’ve paid down your debts. Review your policy regularly to make sure your cover satisfies your current needs.

Over 70% of Australian life insurance policies – more than 13.5 million separate policies – are held through superannuation funds. While this cover is great to have, many of these policies only provide the minimum level of cover employers have to offer, which isn’t enough for most people. In fact, Rice Warner estimates that the median level of cover in superannuation meets is only 60% of needs for life cover (or just 38% for families with children), 13% for TPD cover and 17% for income protection.

Workers’ compensation provides some protection for work-related accidents or injuries. But it doesn’t cover most illnesses, nor does it cover anything that happens to you when you’re not at work. It’s worth checking your states workers compensation legislation. Even if you are covered by workers compensation, the benefits are typically capped in terms of the amount and duration of payments, which means the cover could fall well short of what you really need.

There’s no doubt that insuring the breadwinner is vital for any family’s financial security. But if a non-working or lower income-earning partner became seriously ill or injured, their family would need a lot of assistance to replace their services within the home. Imagine a breadwinner had to reduce their working hours to look after their partner or young children or employ outside help. Either option could prove very expensive, which is why both members of a couple should consider the various life insurance cover options available – regardless of their role.