Why You Should Stop Believing Term Insurance Myths

What if you were gifted an Audi at an EMI as low as that of a Skoda Rapid? Or probably someone offering you a Harley Davidson at an EMI as low as that of a Honda Activa? Besides that, on the very same day, you heard your neighbor murmuring about buying a term plan with a 50 lakhs cover for a premium of just a few thousand per annum!

While the first two may sound like a dream, the later certainly is not a myth! Term insurance covers you for a specific period at a budget premium per year and provides compensation to the nominee on the demise of the insured.

Myths You Got to Stop Believing

People have misconceptions in everything they say and do. Insurance can’t stand anything different. Today through this article, we will debunk the most prevalent myths linked to term insurance and SHOUT OUT LOUD the truth, just for you to start believing how important it is to invest in a term plan.

Myth 1 debunked: I am happily single and don’t need term plan to mingle.

Realty: You might be happily single minus any dependents. But, financial emergencies could break you anytime. You would need term insurance to take care of your debts like housing loan, auto loans and any other financial liabilities.

Depart with a peaceful heart leaving behind your mesmerized memories for your beloved family. But, if you have sufficient funds to take care of your financial debts and have no dependents, you may choose to wipe out the idea of buying a term plan.

Myth 2 debunked: My employer has covered me in a group insurance scheme and so I don’t need term insurance

Realty: Everyone needs growth in their career and so would you too. Ask a realistic question to yourself, would I stick to the same company throughout my life? NO, would be the instant answer popped-up in your head.

A group insurance policy is valid for a period only till you are employed with the company. Besides, the coverage would be based on your current income. Would it be sufficient enough to cover you and your family? Once you leave the organization the group insurance policy stands void. Therefore, it is necessary to buy an individual term insurance plan apart from the group insurance policy to take care of your financial liabilities after your demise.

Myth 3 debunked: I have just turned 24 to buy a term insurance plan

Realty: Any insurance that you buy at a younger age would fetch you heaps of benefits. The premium increases with your increasing age. It is never too early to buy a term plan.

For instance, you have just started working and are still paying the EMI’s of the bank education loan that you had opted to finish off your Masters. God forbid, if any uncertainties arise, your old parents would then have to pay off your pending EMI’s. Therefore, buying a term plan would make sense to relieve them from such financial debts.

Myth 4 debunked: Term insurance companies would always find some loopholes to reject my claims

Realty: IRDA is the government body ruling the insurance industry. It keeps a close watch on the claims registered and ensures smooth reimbursement if found rightful. But, if your claims are denied by the insurance company, do not worry. All you need to do is file an appeal with the IRDA.

Many beneficiaries have already been compensated by the term insurance during unforeseen events.

Myth 5 debunked: If I outlive the policy term, my money is of waste

Realty: Term insurance being the most traditional type of life insurance, offers death benefits if the insured passes away during the policy period. Many people don’t buy term insurance since they feel it’s a thorough wastage of money if they survive the policy period.

But, they are WRONG! Term insurance provides coverage for a specific period at a very affordable premium per year. You ensure that your financial liabilities are taken care off during your absence and your family breathes a sigh of relief. This fact itself is a huge return definitely.

Myth 6 debunked: I need coverage only twice my annual income

Realty: You should be covered considering your future needs. Inflation has given rise to the costs of medical treatments today. The coverage should not be decided only as per the annual income. Because, in reality, your current annual income won’t be sufficient for your future requirements.

The cover should be sufficient enough to take care of your financial liabilities so that your beloved family member’s don’t have to adjust to their current lifestyle. Therefore, never buy a term plan considering your annual income.

Myth 7 debunked: It’s very complicated to buy term insurance

Realty: Term plans are the simplest form of life insurance. They do not hold any cash value. So, you don’t have to keep a track of your money to find out how much goes into policy loan repayment and how much goes into risk coverage. Buying term plan online is the easiest way possible. You simply have to login to the insurance company’s website or visit www.coverfox.com, fill the form and BANG- IT’S DONE!!!

Buying insurance was never so easy like buying it online! No need of running behind the insurance companies or agents and filling lengthy forms. Go online and insure yourself.

Myth 8 debunked: If I buy the term plan online, the insurance company won’t settle my claim

Realty: If you fill the form correctly without any errors, pay your premiums on time and buy riders for extra coverage, no insurance company would reject your claim ever.

All you need to do is, check the claim settlement ratio of the insurance company before you opt for one, to have a clear and transparent image of the company’s background and reputation.

Myth 9 debunked: I need to choose the maximum policy cover

Realty: Many people have a misconception that one should always opt for a maximum policy cover which is not true. You can buy a term plan till your age of retirement. This is because, by this age, most of your liabilities like a home loan, car loan, children’s education are paid-off.

So, paying the premiums unnecessary till a higher age also doesn’t make sense.

Myth 10 debunked: I cannot increase the cover of my term plan

Realty: Who said you can’t increase the cover of your term plan? Yes, you certainly can! For instance, you might have had opted for a term plan at the age of 30 based on your income. But, now at the age of 40, you draw a big fat salary due to decent promotions. Therefore, you can afford to buy a term plan with a higher coverage.

You need not buy a separate plan since your income has increased. Some insurance companies offer term plans wherein you can increase the cover.

The Verdict

At a comparatively affordable rate, term insurance gives you a peace of mind while you leave the world with all your fond memories. So don’t be stingy by hesitating to buy one. Come out of your nutshell and demystify the most prevalent myths about term insurance.

Stop believing any myths and get your factual list right!

Recommended Read: Myths about Term Insurance