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Life can be unpredictable, therefore getting the right life insurance is the best way to protect yourself and your close ones. Getting term insurance is undoubtedly the most cost effective way to secure one’s life. The premiums on term-insurance are relatively small while the sum-assured is on the higher side (sometimes upto Rs. 1 Crore). So why are people still so reluctant to buy a term insurance plan? Unfortunately, over the years, certain myths and misconceptions have deterred investors from even looking closely and examining the benefits on offer. In an attempt to clear these common myths and misconceptions, here are 7 myths about term insurance you should not fall for!
This is perhaps the biggest myth that keeps investors from considering a term insurance policy. The fact is that term plans provide a higher amount of insurance cover at very affordable premium rates. When compared to other types of insurance plans, term insurance premiums are significantly more affordable. The amount of premiums for term insurance also depend on a number of other factors like:
Age of the insured individual
Premium payment term
Other additional benefits that are added to the term plan.
At any point if you find yourself without a job or if you’ve been downsized, you are left unsecured during this time. It is best to get a term plan cover for yourself and every family member.
Many people believe that term insurance is primarily a tax saving fund that insurers make the most out of. This too is a very strong misconception. Tax saving benefits are only a byproduct that serves as one of the advantages of a term insurance plan. The main benefits of a term insurance policy is to financially protect your family in case of an unfortunate event. Therefore, saving tax should only be looked at as a benefit and not the primary objective of a term insurance plan.
There is no such thing as the “best time” when it comes to buying term insurance. It is therefore never too early or late to consider a policy no matter your age or financial condition. After all, tragedy does not see age, gender or cast. Infact, the opposite is true when it comes to the age of the insurer. Younger people looking to consider a term insurance policy will be pleasantly surprised by the affordable premiums with benefits overtime. Individuals below the age of 40 can avail an term insurance by paying as little as Rs. 10,000/ annum for a cover of Rs. 50 Lakhs.
Another misconception, especially among stay-at-home parents, is that there is no need for coverage. There is an economic value attached to every life - homemaker, breadwinner, or even a child. It is therefore important that every member of the family needs adequate term insurance.
Certain individuals often fall prey to the misconception that term insurance is primarily for married couples with children. The presumptive attitude that “I am single and dont need term insurance” is a widely prevalent one. Term insurance essentially protects dependents in your absence. The word dependant is not only limited to your spouse and children. If you are single, your dependents could be your parents or your siblings.
Like most things related to insurance, term insurance policies have also transitioned online. There are a number of benefits of purchasing any insurance plan online. First and foremost, you get to compare and pick from multiple insurance providers and pick one that fits your needs best. This way you are not being pushed into buying something you don't really need. Additionally, going the online route, excludes any middle men (agents) who are looking to make a commision on the insurance your purchase. This can drastically reduce the cost of insurance and result in you saving a decent amount in monthly premiums.
If you are looking to buy a term insurance plan for yourself, make sure you first understand what you are buying into. Once you have understood the purpose and the goal behind a term insurance policy, the next step is to find a provider that matches your needs. It's a good idea to research as many term insurance plans online to find the one that fits you the best. Whatever you do, do not fall for any of the above mentioned myths about term insurance policy. At the end of the day what is important is to provide your family with adequate insurance cover so that they are always financially safeguarded.