Everyone wants to create a secured future for their loved ones and one of the best ways to do so is to have a life insurance policy. However, due to the myths associated with the life insurance, many people find it very tricky and confusing to purchase a right life insurance policy. As there is a wide range of life insurance policies offered by the insurance providers like Max Life Insurance, Insurance policies are mostly misunderstood as a tax saving tool and thus, most of the individuals fail to buy enough coverage to protect the family against eventualities.
Further, in this article, we have briefly decoded top 5 myths related to life insurance to help the readers take an informed decision about a life insurance policy.
In This Post:
Myth 1: Life Insurance is Expensive
Fact: Life insurance plans are known as the simplest form of protection plan that provides an extensive amount of life coverage to the family of the insurance holder at a very affordable premium rate. Life insurance plan provides financial protection to the family of the insured and helps them to maintain a good lifestyle in the event of the demise of the policyholder. According to the suitability and requirement of the insurance buyers they can choose to pay the premium in monthly, yearly, quarterly and half-yearly mode. The sum assured amount offered in a term insurance plan is 10 times the annual premium paid towards the policy.
Myth 2: Life Insurance is for Tax Saving
Fact: Tax saving is just an added perk of having a life insurance policy, as it provides a tax benefit to the policyholder. The major objective of life insurance policies is to provide life protection to the policyholder and their loved ones against any type of unfortunate circumstances. Moreover, it also helps to create a financial cushion to fulfill the future need of the family of the insured.
Myth 3: Old People Should Opt for Life Insurance
Fact: Most of the young salaried individuals often live in this misconception that life insurance plans are apt for people who are in their late 30s and onwards. However, as we know that life is unpredictable and eventuality can strike at any point of life, it is always advisable to have a life insurance policy at an early stage of life while one starts earning. Besides this, the added advantage of buying a life insurance plan at an early stage of life is that one can get higher insurance coverage at a very affordable premium rate. This is because at a young age people are less prone to any life-threatening diseases as compared to people of old age.
Myth 4: Single People Don’t require Life Insurance
Fact: If the policy buyer is single then they have the great advantage of the time compounding on investment. The amount invested by them today will earn higher returns as compared to the amount invested after 5-10 years. One can start investing in wealth creation plan and retirement plan to create a financial cushion while providing life protection and financial security to the family as well. The insured can also compare various plans online and choose the most beneficial plan according to their requirement.
Myth 5: Group Insurance is Sufficient
Fact: Many companies offer a group insurance plan to provide life coverage to their employees. However, group life insurance is only effective until the individual is with the particular company. Termination or job change can cause the end of life cover, leaving the individual without life insurance. Moreover, the coverage amount of group life insurance may not be adequate enough to provide financial protection to the entire family. Thus, in order to avoid mishap of any uncertain circumstances, it is important to buy an individual life insurance policy. Having an individual life insurance policy will safeguard the family financially even in the absence of the insured.
Myth 6: Only the Breadwinner of the Family Should Have Life Insurance Policy
Fact: Life insurance policy does provide coverage against the risk related to the life of the breadwinner of the family. However, it is important to understand that life insurance is equally important to secure the future of your child, secure the life after retirement and risk coverage as well. Child plans with regular income will help to protect the future of the child in the absence of the insured. Similarly, retirement plans can help the policyholder to leave a stress-free and hassle-free life after retirement.