Most people find life insurance as a boring topic and thus it is not discussed enough by people. This makes people a victim to myths and misconceptions. These myths result in procrastination while making a decision in buying the most important financial protection of our life. Let’s look at the common myths associated with a life insurance.
- Myth: If You are Young You Don’t Need Life Insurance
Life is unpredictable! Unfortunate events don’t come with a warning. There are numerous premature and untimely deaths around us. We come across more and more cases of people meeting with accidents that can lead to death at a young age, leaving behind their families in a financial mess in the absence of a life insurance policy. It makes sense to plan for a life insurance policy in the early stage of life so that you secure your family and stay peaceful for the rest of your life.
- Myth: My Employer Provides Life Insurance as a Benefit so I Am Covered
Well done if you have a life insurance policy as a part of your perks in your job. However, the cover provided by most employers is very basic and it may not cover your actual needs and will not be valid after you leave your job.
- Myth: Life Insurance Plan Will Be Only Useful if I Die and it is of No Use to Me
It is the biggest myth that life insurance only offers death benefit. Life insurance plans cater to various needs of the policyholder. If your goal is protection then you can go for term plans, if its savings then you can choose an endowment plan, you can opt for ULIPs for investments needs and retirement plans to save for life post-retirement. In this way, life insurance doesn’t serve a single benefit but multiple benefits based on your objective.
- Myth: Life Insurance is Expensive
Another widespread myth. Today with little effort and online research you can find term insurance plans which offer a whopping INR 1 crore life cover for a surprisingly small cost. This is a substantial amount that will keep your family and dependents secure in your absence. Also, there are other plans with lower premiums which you can customize as per your needs and requirements.
- Myth: Single People Don’t Need Life Insurance
You may be single however as you grow old you would require a sufficient amount to pay for your hospitalization and memorial service bills. Retirement or loss of income due to a critical illness may make you feel helpless and dependent on others. An appropriate life insurance plan with sufficient sum assured will ensure you stand independently even during tough times.
- Myth: You Need to Find an Agent and Go Through a Lot of Paperwork to Get a Life Insurance Policy
The internet revolution is a boon even for the life insurance sector. You compare various plans on your laptop or smartphone and buy the policy by making payment online. When you buy life insurance online there is no hassle of paperwork. This makes the process of buying a life insurance policy easy, convenient and quick.
- Myth: I Bought a Life Insurance Policy Long Back, I Am Safe and Covered
The only thing constant in life is change. The world around us changes frequently. The sum assured which you bought years back may not be sufficient for you and your family members now. Considering the rise in inflation and your responsibilities you will need a sum assured which is at least 20 times more than your annual income. You should review your life insurance portfolio regularly and ensure you have sufficient coverage to match your current lifestyle.
Life insurance is a crucial decision and so it is important not to get influenced by the myths. Life insurance should be taken keeping in mind the factual information. So, now that the myths have been busted, evaluate your life insurance needs and calculate your premium here.