When it comes to term insurance, there are numerous myths and misinformation linked to such an investment option. Though uncertain times have shown how having a financial backup is crucial, many individuals are satisfied with the group policy provided by their employers. So, do you really need an individual term insurance policy? Today, let’s debunk some common misconceptions related to term plans.
- Myth 1: Term Insurance Is Just for Tax-saving
Though term insurance plans do offer lucrative tax benefits that alone should not be the reason to purchase insurance. If you consider the features of a term insurance policy, you can make the most of it to secure your dependents. Many policyholders may view insurance as a tax-saving instrument, but you can benefit from the risk cover and low premium rates. In case something were to happen to you, the insurer would pay out a lump sum death benefit to your loved ones. This corpus can go towards securing the expenses of your family, education of your children, the retirement of your parents, healthcare, etc. Hence, if you look beyond the tax perks, you can easily reap the benefits of term plans.
- Myth 2: Term Policies Offered by the Employer Is Enough
Many organisations provide their employees with group term insurance plans at zero cost. Such coverage can be a great backup and additional security over your policy, but it cannot be the only one. The sum assured offered under the group policy won’t be enough to make ends meet, as the plan isn’t personalised to your insurance requirements. Also, you are covered under the policy till you are a part of the organisation. So, what if you were to lose the job or wanted to switch to a company that offers no insurance? The individual term plan allows you to select the right sum assured amount, the policy term, insurance riders, etc. based on the needs of your family. Estimate the right amount of coverage for your dependents with the online term insurance plan calculator!
- Myth 3: Term Policies Only Cover Risk of Death
Term plans are pure risk covers that safeguard your loved ones from the unfortunate risk of death but that is not the only benefit. With the help of rider benefits, you can maximise your insurance coverage to avail protection from other perils. Nowadays it is common to get diagnosed with a major ailment, as you grow older or to suddenly face loss of income. But term insurance secures your dependents from such risks. Some popular rider options are critical illness cover, accidental death rider, loss of income cover and more other riders. In case such mishaps affect you, the cover shall pay out a lump sum or regular sum.
- Myth 4: If You Are Young and Healthy, You Don’t Need Insurance
Being young and healthy is the best time to get a life insurance policy as you get an affordable premium rate. If you wait for the time you turn old and need financial security, the premiums shall be expensive due to your health and age. Moreover, term insurance age limit is a thing and you may run out of time to purchase one if you wait long enough. Thus, you shouldn’t refer to your current status to understand the importance of term plans because as you age, your dependents shall require a backup.
- Myth 5: Homemakers Don’t Require Term Insurance
You may believe that only the breadwinners or the salaried individuals of the family need insurance. But as a homemaker, having a financial backup in their absence can go a long way in helping out the family. Though stay-at-home parents mostly care for the kids and take care of the home, they can be tough to replace no matter what. Also, if you were to consider the future, nothing is certain and thus, it is crucial to have term insurance coverage even if you are a homemaker.
Now you must have learnt what term insurance myths are, with the above pointers. So, safeguard your family and get the right amount of coverage with the term insurance plan calculator now! However, it is advised to compare various insurance providers and the policies they offer. This shall enable you to get the most suitable insurance policy available in the market.