Business & Economy

5 term insurance myths busted for you

By A Correspondent

Mumbai, June 26, 2020

For some reason, insurance policy remains the most misunderstood financial instrument among all investment schemes. The problem is that there is a false image set in the minds of people and most individuals fall for some common misconceptions that revolve around term insurance policies. Term insurance policies are actually beneficial as they provide a fixed assured sum to the policy holder’s nominee in case of their demise.

However, there are numerous myths that surround term insurance which make people skeptical about purchasing one. Life is uncertain and no one know where a health emergency situation may arise.

Buying a life insurance policy might be one of the simple and effective ways to financially secure your family members who are dependent on you even after you are gone.

Here are 5 myths surrounding insurance policies that might help you clear all the misconceptions you have surrounding buying a term insurance plan.

1. Myth: Only married individuals need a term insurance plan

Reality: The most common misconception is that people feel that only those who are married need to get a term insurance plan. However, this is not at all true because one does not have to get an insurance plan to secure the future of their spouse or their children. A term insurance plan can help you pay off debts (if you have any) like credit card bills, housing loan, personal loan, car loan, etc. The last thing you want is for your family to bear the financial burden in case of your untimely demise. Even if you are not married, a term insurance can provide a cushion to your siblings or even your parents who might depend on you even after you are gone.

2. Myth: Term insurance plans are unaffordable

Reality: Although a lot of people avoid buying a term insurance plan because they are convinced about the fact that it is going to be an expensive deal, in reality this is not at all true. In fact, a term insurance plan is among the cheapest insurance plans available in the market for purchase. Some term insurance companies even offer a term insurance plan for as low as Rs. 500 per month. This monthly amount that goes towards the insurance as a premium is quite low, especially if you look at the sum assured to the nomine which is usually Rs. 1 crore.

3. Myth: Term insurance can be only bought when you are young

Reality: The third and common myth surrounding a term insurance plan is that they are can only be benefited if one buys them at an early age. That’s not true because a lot of people purchase term insurance plans at the age of 40 and 50 as well. Most insurance companies in India allow you to buy a term insurance plan till the age of 65. So even if you are past the age of 40 and don’t have a term insurance plan, don’t worry, you can still buy one.

4. Myth: Group insurance provided by the employer is enough

Reality: A corporate health insurance policy (also known as group insurance) is bought by an employer for its company employees. A lot of people feel that the insurance cover offered by their employer is enough. What people do not realize is that such insurance policies offer only basic benefits and the sum assured might not be adequate to take care of your family. This is why one must not entirely depend on group insurance and get a term insurance to financially secure their family’s future.

5. Myth: Online term insurance is a risky business

Reality: A lot of people feel that buying an online term insurance plan is not a good idea and that it is a huge risk. However, in reality getting an online term insurance is the easiest way to secure your family’s future. It is easy to get an online term insurance. When you buy a term insurance online, you are directly buying from the insurance agency. There is no middle man so you do have to pay any commission fees either.

Now that the misconceptions surrounding a term insurance plan are busted, when are you planning on getting your term insurance policy?

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