Busting nine life insurance myths

Updated

Wednesday, 10 Jun 2026

Many people have negative feelings when it comes to life insurance. It’s worth knowing the facts as these myths could be stopping you from getting cover you really need.

Here we bust nine common life insurance myths to help you make informed decisions about your cover.

Myth # 1 – Life insurance companies don’t pay claims

There’s a common perception that insurers look for reasons not to pay.  In fact, insurers pay at least 93% of life insurance death claims.¹

If you meet your duty of disclosure and you’re covered for the condition you’re claiming for, you can generally trust your claim will be paid.

Myth # 2 – I'm young and don’t have children or a mortgage, so I don’t need it

Life insurance isn’t just about debts and dependants, it’s also about looking after yourself. Cancer and other serious diseases are becoming more common in younger people, so it’s not safe to assume illness only affects older people.

If you became ill or disabled and couldn’t work, income protection could help you manage without relying on family or friends. 

Applying when you’re young and healthy also has benefits. Cover is generally cheaper, and you won’t need to worry about your health affecting your options later (see myth #4).

Myth # 3 – I won’t be covered if my health changes

Once your cover starts, it won’t change, even if your health declines.

You generally don’t even need to tell your insurer about a change in your health unless you’re making a claim.

Myth # 4 – You have to do lots of medical tests to get covered

Some life insurance products need medical tests, but it may be as simple as a blood test and a GP examination.

• If you have an existing medical condition, insurers will usually ask your doctor for a report rather than require tests.
• Pre-existing conditions generally aren’t covered, so it’s important to answer all questions accurately upfront. This lets insurer assess any impact on your cover, so you know exactly what is and isn’t included.

Myth # 5 – Level premiums don’t go up

Level premiums are designed to save you money over time by removing the impact of age-based premium increases.

They’re based on your age when cover started, not at each anniversary. This spreads your cost over the years. Level premiums cost more than stepped premiums early on, but generally become cheaper by comparison over time.

Premiums can still rise each year, even with level cover, because age is just one pricing factor. Others, like claims trends across Australia can also lead to repricing.

Insurers reprice by group, not individual policies. Many  insurers in Australia have repriced level premiums before, so talk to your adviser or insurer about your policy and any recent repricing.

Myth # 6 – I’ll be stuck paying for cover I don’t need

Life insurance is designed to change as your life changes; your cover needs can vary significantly over time.

You may want to increase your cover when you marry, have children or take on a bigger mortgage, and reduce it once children are grown or debts are paid down. 

Your financial adviser can help you work out how much cover you need at any given time, so you’re not paying for more than you need.

Myth # 7 – The cover in my super is enough

Approximately 8.5 million Australians have life insurance through their super.²

This cover is valuable, but many of these policies lack features professionals need.

For early release of super, disability definitions are tied to invalidity rules. These can be harder to meet than the own occupation definitions available outside of super. Group super plans may also lack guaranteed renewability.  This means attractive features, like long benefit periods or high-income replacement ratios, can change at any time.

Myth # 8 – I’ll be covered by workers’ compensation

Workers’ compensation covers some work-related accidents or injuries, but not most illnesses or anything that happens outside of work. It’s worth checking your state's workers’ compensation legislation.

Even where it applies, the benefits are typically capped in amount and duration so cover could fall well short of what you need.

Myth # 9 – Only the main breadwinner needs life insurance

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 may need significant help to replace what they do at home.
The breadwinner might need to reduce working hours or pay for outside help, both costly options. That’s why both partners in a couple should consider life insurance cover, regardless of their role.

Life insurance tailored to your needs

There is no simple answer as to whether or how much life insurance you need.

As advisers, working with healthcare professionals, we know the product options in the market and the risks you face. We can help you find the right cover for you, your family and your business, so you’re not paying for what you don’t need, but are covered for what you do.

The information in this article is a guide only and doesn’t represent professional financial advice. Avant’s life insurance advisers can review your situation and recommend the right cover for your circumstances.

More information

To learn more about Avant Life Insurance services and how we can help you with your life insurance needs, visit avant.org.au/advice, call us on 1800 128 268, email us at avantlife@avant.org.au or read our FSG.