Term insurance is one of the simplest forms of life insurance policies, yet many people misunderstand it. It is a pure protection plan that pays the death benefit to the policyholder’s family member in the event of their untimely demise during the policy period. If you are a first-time term insurance buyer, you may naturally do your research online about the product or consult your friends and family on how to go about the purchase. But, you must know that everyone may have a different opinion.
So, to help you make the right purchase decision, we list down a few common term insurance myths and the truth behind them.
Myth 1
Term insurance is costly
Truth
Many people avoid buying term insurance mainly because they believe it is costly and the premiums are high. But, the truth is term insurance has the most affordable premium compared to other life insurance policies.
Since term insurance does not have any savings or investment component, the premiums are affordable; you can purchase a policy with a premium as low as Rs.500 per month. Many insurance companies in India offer a term plan with a sum assured of Rs.1 crore at a low premium.
So, when you buy a term policy, do your research well, compare the plans, and you will surely find a plan that suits your budget and specific needs.
Myth 2
Buying term insurance online is risky
Truth
This is one of the most common and bizarre misconceptions people have about term insurance. But, nothing can be further from reality. When you buy a term plan online, you have the liberty to compare the plans in terms of coverage offered, premium, inclusions, charges involved, etc., from different insurers simultaneously and make an informed buying decision.
Also, when you buy a term insurance policy online, you directly deal with the insurance company; there is no involvement of an agent or third party. This significantly reduces the overall cost of the agent fees, and you can get the best coverage at an affordable price.
Myth 3
Unmarried people don’t need term insurance
Truth
Many people have this false notion that they need not purchase an insurance cover until they get married or become a parent. Even if you are unmarried, you may have certain liabilities like a car loan, credit card bills, personal loan, etc. And a term policy will act as insurance against these debts.
In the event of your untimely demise, the repayment burden will fall on your family. But, if you have a term cover, your family can quickly pay off the debt with the death benefit they receive. Also, lastly, when you are young and single, you may not have too many financial responsibilities compared to a married person. In this case, you can afford to purchase insurance with a lower sum assured with an affordable premium. You can increase a coverage amount later as your responsibilities grow.
Myth 4
People over 40 cannot buy term insurance
Truth
While it is advisable to purchase a term plan at a young age, it is never too late to buy one. Many insurance companies in India allow you to buy a term plan till the age of 55 and provide coverage till you are 75 years old. So, if you are over 40, you can easily buy a term plan of your choice and get the much-needed financial protection for your family.
Final Word
Now that you are aware of the common myths don’t pay heed to such wrong information. Do your research well and buy a policy online that best suits your needs.
