In India, over the past few years, the number of life insurance buyers have increased significantly. However, there are still many who have no insurance cover. This can be attributed mainly to the misconceptions they have about life insurance policies. Read on to know about the common myths and the facts behind it.
In India, talking about death is a big taboo and people generally feel uncomfortable having a conversation about it. And, hence, they fail to acknowledge the importance of being adequately prepared financially for the uncertainties. Such ignorance leads to many misconceptions about the life insurance policy. They fail to acknowledge its significance as a support mechanism to protect the family’s future financial needs.
Here is a list of some of the most common myths about life insurance and the reality behind it.
Myth – You must buy a life insurance policy at the start of your career
Buying insurance cover early in your career has many advantages. You get the benefit of a lower premium and also get cover for a longer period. But, this does not mean that you should not or cannot buy a life cover plan when you grow older. As you grow old, you may achieve several milestones in life at which time it would be critical to buy life insurance. For example, when you get married or become a parent, you would want to ensure that your spouse’ and children’s future finances are secured. The premium may be slightly higher when you grow old, but having life insurance is paramount to secure your family’s future.
Myth – Life Insurance is only a tax-saving investment instrument
Investment in life insurance policy allows you to get tax benefits under Section 80C of the Income Tax Act, but the tax deduction is only a minor component. The core objective of a life insurance cover is to provide your family protection against uncertainties like death and accident. Securing your loved ones’ future is the sole reason why you must invest in a life cover.
Myth – Group cover offered by the employer is sufficient
Most employers in India offer insurance cover to their employee under the group insurance plan. However, you must know that this policy is valid only until you are employed with the organisation. When you leave the job, the cover ceases to exist, and you will not have any protection. Also, often, the coverage offered by the employers are inadequate, and it may not suffice to cover your family’s financial needs. Hence, you should buy a good life insurance policy to safeguard your family even when you are not around.
Myth – Single/Unmarried people do not need life insurance
If you are unmarried, you are in the best position to get the maximum benefit of a life insurance cover. The money you invest now will yield you better returns as compared to the same money you may invest five years later. This is because of the power of compounding. You must invest in a robust insurance plan as soon as you start working. You can buy a policy that invests in money market and start contributing towards your retirement goals from an early age.
Now that you are aware of the various myths invest in a good insurance policy and secure your family’s future.