6 Myths About Life Insurance Busted

By | March 28, 2015

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In all likelihood, you’ve heard all about why life insurance is important. But. something stops you from going ahead and buying it.

It’s that little red devil on your shoulder that tugs at your ear, that weighs you down with the usual falsehoods surrounding life insurance, that feeds mischievous little pieces of advice (let’s call them ‘myths’) that seem hard to resist.

Here, we bust 6 of those mischievous myths.

Myth: Life Insurance is costly!

Many people are reluctant to buy life insurance as they falsely perceive life insurance premiums to be expensive, making these products unaffordable to the average Joe.

Fact: Life insurance premiums vary significantly depending on a person’s age, health, lifestyle and the type of policy he/she buys. It is always possible to find an affordable life insurance policy as per your budget.

Myth: I am single, so I don’t need any life insurance cover.

Life insurance is often marketed to project its importance to those with families i.e. a spouse and children.  This leaves single people in its wake.

Fact: Even as a single person, you can buy life insurance to plan for retirement, pay off personal debts, pay medical bills and other related expenses. Moreover, at a young age, policies are more economical and this cover can be extended to your family when you start one in future. Even if you’re single, you may have dependent, aging parents; life insurance helps provide for their financial security.

Myth: My employer provides life insurance and this is enough for me.

Most employers provide life insurance coverage as an added benefit to their employees under group life insurance schemes. Since premiums under these schemes are shared between the employer and the employees, they are viewed as economical options and employees believe these policies are adequate.

Fact: You cannot completely rely on what your employer provides. If you discontinue your job or retire, you lose your insurance cover. Availing life insurance at a later stage in life is hard. Also, group schemes are standardised plans and may not suit your individual financial situation. It is always advisable to purchase an additional, individual policy for a particular period of time or for your whole life to ensure the financial security of your dependents.

Myth: Only the breadwinner of a family needs life insurance.

The financial importance of a non-earning spouse, usually a stay-at-home parent, is often grossly undermined.

Fact: Stay-at-home spouses also have to be covered under life insurance. The financial implications arising from their unfortunate loss will be manifested in the cost of support they used to provide. Funds would be required to pay for expenses such as childcare, meals, housekeeping etc. all of which would have to be availed from professional service providers in the absence of the stay-at-home spouse.

Myth: I am too young to think about life insurance.

Youngsters often view life insurance as an age-related need.

Fact: Buying a life insurance policy when you are young and healthy is more economical since premiums are low for low-age groups. Premium charges are higher later in life, since life expectancy risks increase as you age.

Myth: All life insurance policies are the same.

Many people think life insurance is all about the amount you are covered for and cannot understand why one should bother with any research or making tedious payments.

Fact: All life insurance policies are unique and come with different features which vary from individual covers to family floaters, pure protection plans, retirement plans and investment plans. You can choose your policy based on your personal needs. A little bit of research will help you find the best life insurance policy for you.

So, if you haven’t yet covered yourself with any insurance product, go out there and get one. That little red imp can gnash his teeth all he wants!

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