Although there are many life insurance plans for you to choose from, it is easy to get caught up in the web of wrong information available on the internet. So, to help you get the best coverage, we debunk the most popular myths about life insurance.
Buying a life insurance policy is one of the best ways to protect your family against the various uncertainties of life, including accidental-death, loss of a job, disability, etc. Life insurance is specifically designed to provide you with a wide range of benefits so that you and your family members can meet the financial goals and smartly overcome any financial crisis.
Despite the various benefits of life insurance, there are many prevailing misconceptions about it among the people. If you are a first-time life insurance buyer, it is paramount to educate yourself with the right information about this financial instrument to make the right purchase decision.
Some of the most common myths and the truth behind are listed below:
Life insurance policy is useful only after the policyholder’s demise
Ideally, life insurance is meant to provide financial assistance to the policyholder’s family after their demise. But, it is not the only benefit you get from it. Today, with different types of life insurance plans available in the market, some of the policies allow you to get exposure to the investment market and get valuable returns. So, a life insurance policy covers more than death risk. It also allows you to accomplish your financial goals.
Life insurance policy is meant only for tax-saving purposes
Most life insurance buyers in India invest in a life insurance plan mainly to get a tax benefit and reduce their annual tax liability. The primary object of a life insurance policy is to offer a financial safety cover to the family, whereas tax-saving is only an added benefit that you can enjoy.
Life insurance covered offered by the employer is sufficient
This is one of the most common misconceptions people have about life insurance. Although you get coverage under the group insurance policy offered by the employers, you must know that the cover is only valid until you are employed with the company. Once you quit the company, you cannot file a claim. Also, often, such policies have basic coverage and offer minimal benefits.
Hence, it recommended that you purchase a life insurance policy on your own to avoid unpleasant surprises and financial setbacks.
It is better to invest in other investment instruments than life insurance
You must realise that life insurance and other investment instruments serve entirely different purposes, and comparing the two is not right. The main objective for you to invest in a life insurance policy must be to assure your family financial security, even in your absence. Additionally, some life insurance plans like ULIPs are known to provide excellent returns in the long-run. So, while you may invest in various investment instruments to build a corpus, you must not overlook the importance and benefits of life insurance in offering your protection against uncertainties.
I have no dependents, I don’t need life insurance
If you are alone and have no dependents, you are in a great position to reap the benefits of life insurance. The premium for an individual is much lower than a policy that covers a full family. Besides, if you invest in a plan that offers your investment opportunity, you can create a corpus for retirement while staying protected throughout your working years.
So, now that you are aware of the various myths, make sure that you are wary of such wrong information and buy the right policy to suit your specific needs.