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Myths about Life Insurance Which are Not True

Posted by : Siddharth Jalan on | Sep 19,2017

Life Insurance might be one of the least interesting as well as favourite topics of so many. At the same time, Life Insurance has got so many myths linked to it that people avoid the subject altogether and try not to discuss or research about it.

However, if you don’t have a life insurance cover, you are putting your and your family’s future at risk in case of any untoward event. It is one of the most important investments you could make for your family. While many would agree about the importance of the life insurance in their life, the myths surrounding it would still make it one of the most complicated products to comprehend and explore. Let us debunk some common myths associated with life insurance and help you understand it better

#1. It is an expensive investment
Isn’t that the first thing that comes to your mind when you think of life insurance? It is not true though! In the current scenario, you almost have a life insurance product to fit every budget and requirement. You can buy term insurance which happens to be way more affordable than the whole life insurance policies and comes with lesser premiums. Also, if you start your insurance policies at a younger age when you are healthier, the premiums would be much lesser.

#2. I am young and healthy; I don't need a life insurance
This is by far the biggest myth which needs to be broken immediately. Everyone, irrespective of whether they have a family or are single, requires life insurance policy to cover at least their medical expenses, funeral bills, or any unpaid debts. A life insurance is best bought when young and in good health, as you will get better coverage and would also cost you less.

#3. I have health issues so don’t qualify for a life insurance policy
For many of us, this is a major concern. Having an ailment like a heart condition, cancer or a fluctuating blood pressure is definitely going to increase the cost of your life insurance cover, but will not render you unqualified for life insurance policies. There are a lot of life insurance products specially designed for people having specific medical conditions which you can opt for.

#4. My cover needs to be twice my salary
Again a myth. Life insurance should never be measured based on your annual salary. Instead it is recommended to measure your coverage based on your medical expenses,, debts, future security and cost of living of your family. Do a thorough cash flow analysis to understand the true value of cover you would require for your family in the event of your death. Your life insurance cover would depend on how much you can invest and the kind of cash flow you plan for your family’s future post your death.

#5. My employer provides me a life insurance coverage so I don’t need to invest personally
This can be a great way to start investing for your family’s future but is definitely not sufficient as a stand-alone. Most often, such insurance policies have a low payout and you would not be able to take it with you when you quit your company. Having a personal insurance life cover is always a good option.

#6. Only those who work need a life insurance
Not true. Being a breadwinner means income to the family. However, you must not ignore the services rendered by the homemaker. Most of the time, the cost of the services rendered by a homemaker or a stay-at-home spouse cost more than the actual breadwinner, and hence it makes sense to insure them as well. In the case of loss of the homemaker, you can easily compensate for the cost of day care for your child and home maintenance if insured.

#7 Life Insurance is only a means for tax saving
Wrong! The objective of a life insurance plan is to offer protection to you and your family post your demise. It would help you to build a good corpus to take care of your family’s requirement for their future needs. Therefore tax saving is just an added benefit that a life insurance plan can offer.

The Bottom Line
You need to come out from these misconceptions and try to explore the various possibilities that life insurance provides. Not only does it secure your family’s future but also provide them with a small legacy to start their life without you with dignity. Leaving life insurance from your budget is like living your life without any kind of security.

You can always consult a financial advisor check for options online and compare numerous insurance service providers before you buy the one suiting your requirement. Also, you need to remember that not all life insurance policies are the same and you must always go for a brand you trust and a company with good financial ratings and a clean reputation. Life insurance is the only way you can take care of those you love even when you are not around.

Recommended Read:
Know About Different Life Insurance Companies in India
Life Insurance FAQ’s – Things you need to Know

Authored By: Nidhi Mahajan
Nidhi Mahajan is a Guest Blogger and passionate about Content writing. She has been creating SEO Friendly Content for more than 10 years. She can write on all niches for writing and is great at providing tips on SEO and Blogging.