Top 5 Common Life Insurance Myths and Facts
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Kotak e-Term Plan

Top 5 Common Life Insurance Myths and Facts

There are a lot of misconceptions associated with Life Insurance policies. Here are the top five common life insurance myths and facts you should know.

  • Oct 20, 2021
  • 1,570 Views

We live in a world of the Internet, where information on anything and everything is just a click away, and this also holds true for life insurance policies. This abundance of information has made self-education on the topic challenging, leading to several misconceptions, thereby turning a simple subject into a convoluted one. This article will debunk some widespread misconceptions about life insurance.

Life Insurance is an Exorbitant Expense

After gaining some background on what life insurance is, you may easily discover life insurance plans that suit your investing bracket that does not pack a punch to the budget if you do your research well. Even a little annual cost can provide a substantial basic life insurance policy, enabling your beneficiaries to fulfil their financial needs with the numerous life insurance benefits.

I don’t require insurance as I have no dependents

It is advisable for every single person to buy enough life insurance to cover personal debts, medical expenses, etc. Life Insurance benefits your family to pay off hefty unpaid bills after your death. These situations amplify the consequences of retirement and financial challenges. As a result, a life insurance policy might considerably assist you in managing these expenditures.

Insurance Plans Can’t Be Tailored to Your Specific Needs

In this day of growing competition, nothing stays the same for long, and insurance policies are no exception? Insurance plans can now be tailored to fit your unique requirements. Riders, such as critical illnesses, accidental death, and maturity benefit, may be added to your insurance plan to get additional benefits, and insurance premiums can be customised to meet your budget. Not only this, but you can also choose from the different payout options available.

Life Insurance Is an Invitation for Excessive Paperwork

Long gone are the days when you had to maintain bulky files for each policy you had. With technological advancements and the digital revolution, the entire process of applying, paying premiums, and receiving payouts of an insurance policy has become easier and hassle-free. With just a few clicks on your computer or smartphone, you can now evaluate several plans, check out your payment status, buy a policy online, and even make life premium payments online. This makes purchasing life insurance coverage simple, convenient, and fast.

My Life Insurance Plan Must Be Double My Annual Wage

Though it is ideal to have insurance that is double or beyond your annual income, there is no standard or golden rule for the same. You must take into consideration your individual circumstances to determine the quantity of life insurance required. From paying off debts and supporting your family for several years to undertake their medical, education, and other expenses, you have multiple financial responsibilities to take care of. Therefore, you should do the math as per your requirement to establish the exact amount of insurance that needs to be acquired.

Only after my death will my life insurance be useful

There are several choices available to assist you in establishing a corpus that will allow you to be financially independent in retirement, pay outrageous medical expenditures, or build your wealth. A timely investment in the proper insurance policy based on your need-suitability assessment will always benefit you.

My company provides coverage for me, so I don’t need another policy

Your employer will cover you while you are working for the organisation When you quit or retire, the policy is ended. If the organisation experiences financial difficulties, the policy may be cancelled or the benefits reduced. In that situation, you will be stranded when you most need insurance coverage.

When you are young and healthy, employee insurance may be sufficient

It will not be enough to meet the needs of your future family, such as children’s education, marriage, medical emergency for aged parents, rising living costs, and so on. Second, the policy might only provide a death benefit. This means that if you do not have a financial plan in place to cover your costs after retirement, you will be on your own.

Other than life insurance, I will get better returns on my investments

Comparing products must be done on a like-for-like basis. Would you compare a smartphone by splitting it down into a phone, camera, hard disc, browser, and so on? Life insurance products, like smartphones, offer a variety of characteristics, including mortality risks, morbidity risks, longevity risks, guaranteed returns, market-linked returns, and entire life cover, among others.

The proceeds of the majority of life insurance policies, on the other hand, are tax-free. Life insurance policies are typically long-term financial instruments that give competitive risk-adjusted returns in comparison to other asset kinds over time.

Claim Settlement is a Hassle, and the Insurance Company Can Deny the Payout or Hold a Portion Back

Would you compare a smartphone by splitting it down into a phone, camera, hard disc, browser, and so on? Life insurance products, like smartphones, offer a variety of characteristics, including mortality risks, morbidity risks, longevity risks, guaranteed returns, market-linked returns, and entire life cover, among others.

The proceeds of the majority of life insurance policies, on the other hand, are tax-free. Life insurance policies are typically long-term financial solutions that deliver competitive risk-adjusted returns over time when compared to other asset classes.

These are just a few of the most common insurance myths. The idea is to include life insurance in your budget unless you have sufficient assets to meet your family’s needs after you pass away. It is recommended that you buy life insurance online while keeping all of the considerations above in mind. People may buy or avoid these plans without thoroughly understanding their features, terms, and restrictions. It’s easier to remain on top of things if you know what you’re getting into! Now that you’ve refuted the myths, you’re ready to make an informed decision and secure yourself and your loved one’s future.

Kotak e-Term Plan

Download Brochure

Features

  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

How Does Life Insurance Work?

Why Renewal of Term Insurance Plan is Important

Always keep your Nominee informed

How Much Life Insurance Do You Need?

Are Deaths Due To Coronavirus Covered by Kotak E-Term Plan?

What Is Social Impact Investing and How Does It Benefit Society?

Does Life Insurance Pay for Suicidal Death?

Various Term Insurance Premium Payment Options Available in India

Is It Advisable To Have Multiple Life Insurance Policies?

Why You Should Buy Term Insurance under the MWP Act (Married Women’s Property Act)?

How do life insurance payouts work?

Different Types of Insurance Policies in India

How to Calculate Human Life Value(HLV)?

Is Voluntary Life Insurance the Same as Basic Life Insurance?

Different Kind of Deaths that are Not Covered in a Term Insurance Plan

Life Insurance with Money Back vs Without Money Back

What is Human Life value and a Human Life Value Calculator?

Health Insurance VS Life Insurance

Can An Individual Buy Multiple Term Insurance Plans?

What is the Current Trend in Term Insurance?

Should You Buy Life Insurance After Getting Married?

How Much Life Insurance Cover Do I Need?

“Life” Insurance or “Death” Insurance?

How Do Term Insurance Plans Differ for Smokers?

1 CR Term Insurance Plan: How to Pick the Best 1 CR Term Plan

Digital Life Certificate for Pensioners Seeking Pension

Does Family History Affects your Term Life Insurance Rates?

ULIPs: Suitable for all

FAQs on Life Insurance

9 Most Important Things You Must Learn About Paying Life Insurance Premium

Take 100% Responsibility of Your Family with Term Life Insurance

Why do I Need Life Insurance?

Why Your Family Should Know About Your Life Insurance Policy?

Details Required To Be Filled In A Life Insurance Form

When are Millennials required to take out a life insurance policy?

Life Insurance for Millennials

How to Find the Best Term Insurance Plan in Seven Steps

Benefits of Buying Term Insurance Plan for Senior Citizens in India

Term Plan with Return of Premium (TROP)

6 Things You May Not Know about Life Insurance

Loan Against Life Insurance Policy

How Much Life Insurance Costs and How Much Insurance Cover You Need?

Choosing a Life Insurance Beneficiary

Why Buying a Term Insurance is Important for all Parents

Choosing Between Short-Term & Long-Term Insurance Plans

Think About Life Insurance Sooner than Later

What are robo-advisors in insurance?

What are the Benefits of Endowment Policy?

What is Insurance Coverage? Overview, Types, and Examples

5 Smart Steps to keep in mind while buying term policies

Difference Between Money Back and Endowment Policy

Why One Must Buy Term Insurance before 25 Years

Important Terminologies of Life Insurance

Life Insurance Vs. Mutual Funds Investment

How to Choose the Right Life Insurance Policy for Your Age?

Is it Possible to Reduce Life Insurance Premium without Affecting Sum Assured?

Everything You Must Know About ULIP Riders

Can a Term Plan be the Substitute for a Retirement Plan?

भारत में सर्वश्रेष्ठ टर्म प्लान कैसे चुनें?

Do Life Insurance Premiums Increase Every Year?

Choose the Nominee of a Term Life Insurance Plan Wisely

What is an Endowment Plan?

Life Insurance vs Mutual Funds

Terms and Conditions of Term Insurance Plans

10 Most Frequently Asked Questions - FAQs on Term Insurance

Is it Worth Buying Disability Rider on Term Insurance?

Is it Possible to Make Changes in a Term Plan’s Specification Post Purchase?

How to Select a Perfect Life Insurance Policy in India to Protect Your Future?

Beware of Phishing & Fraud Insurance Calls

Important Features of a Term Insurance Plan

What Is Staggered Payment Option Under Term Insurance Policy?

All About Backdating in Life Insurance

All about Your Rights and Duties While Buying Life Insurance Policy

Why Do Life Insurance Agents Avoid Selling Term Plans?

Important Life Insurance Terms You Must Know

When Should You Review Term Life Insurance of Yours?

Why Term Insurance for Women is Important?

Why Life Insurance Is Always a Smart Decision

Key Things to Review in Your Life Insurance Policy Document

5 Reasons Why a Women Should Buy a Life Insurance

What Is the Procedure to choose a nomination in life insurance policy?

Difference Between Term Insurance and Endowment Plan

All About Life Insurance and How It Works?

Reasons Why Term Insurance Claims Get Rejected

What Is The Life Insurance Penetration In India And How Does It Compare Globally?

How To Use Different Types Of Life Insurance For Retirement Planning?

Benefits of Term Insurance with Critical Illness Rider

Term Life Insurance Vs Money Back Life Insurance

Can You Transfer Life Insurance Policies to Another Company in India?

What Is a Whole Life Insurance Plan?

What is a Single Premium Term Plan and its Tax Benefit?

Types of Insurance You Must Invest in for Secure Future

How to Choose a Life Insurance Policy

Different Types Of Life Insurance In India

5 Easy Steps to Buying A Policy

Does Life Insurance Policy Cover Covid Death?

All about Life Insurance Calculators

5 Things to Keep in Mind While Buying Life Insurance Policy

Life Insurance and Millennials

How to Buy a Term Life Insurance Online

A Term Insurance Guide for Disabled People

What Should One Consider Buying: Term Insurance or Traditional Life Insurance

Life Insurance Beneficiary

5 Reasons Why You Need Life Insurance in College

Importance of Checking Claim Settlement Ratio before Buying Life Insurance

Most Common Life Insurance Riders to Enhance Your Existing Policy

जीवन बीमा क्या है?

Customer Awareness on Information Security

Health Insurance VS Life Insurance

Term Insurance Claim Process

Life Insurance Policy Closure

Comparing low premium term insurance Is Not the Only Factor While Buying Life Insurance

Term Insurance Vs Car Insurance: A Budgetary Choice You'll Regret

Insurance Vs Investment - A Guide to Your Financial Goals

6 Different Types of Insurance Policies

Staying Insured While Investing

How to Make Death Claims on Life Insurance?

What is Underinsurance & The Dangers of Being Underinsured

What Happens If I Stop Paying My Life Insurance Premium?

Why Online Term Insurance Plans Cheap?

Insurance Changes You Need to Make Post Marriage

Life Insurance and Retirement Planning

Kotak Life Claim Settlement Ratio

Is Life Insurance For Millennials Really Needed?

Term Insurance Vs Life insurance: Small Details, Big Differences

Best Insurance Plans in India

क्या जीवन बीमा एक निवेश है?

Process of Filing A Claim For Life Insurance

Difference Between ULIP and Endowment Plan?

5 Ways to ensure faster settlement of claims

How Often You Must Review Your Life Insurance Policy?

Life Insurance Plans for Women

भारत में जीवन बीमा पॉलिसियों के प्रकार

Difference Between Insurance and Assurance?

What Should One Expect During the Medical Evaluation for Life Insurance?

How to Choose Life Insurance for All Ages?

5 Advantages of Life Insurance Going Digital

How to Buy a Life Insurance Plan?

Do Your Financial Planning with Life Insurance!

In India, should NRIs purchase life insurance?

How Many Insurances Should I Have?

Why is Medical Test Important While Buying a Term Insurance?

Can NRI Buy Life Insurance in India?

Role of Life Insurance in Your Financial Portfolio

Term Insurance for Home Loan: How Term Plan Helps in Paying Off Home Loan?

वरिष्ठ नागरिकों के लिए ऑनलाइन टर्म इंश्योरेंस प्लान खरीदने के लिए गाइड

Is It Time to Review Life Insurance Policy of Yours?

जीवन बीमा पर ऋण

How to Customize Your Life Insurance Policy with Riders

Savings cum Protection Plans Secures Your Family from Unforeseen Events

Sabse Pehle Life Insurance

5 Common Life Insurance FAQs and Answers

Who Is A Nominee In A Life Insurance Plan?

Why do most Indians choose the wrong way to buy life insurance?

Why You Should Never Cancel Life Insurance Policy

What Is Investment Insurance?

Biggest Life Insurance Myths

Nominee in insurance - A Complete Guide on nomination in insurance

Term Life Insurance vs Accidental Death Insurance

NRI Premium Payment Options

Can You Apply For A Life Insurance After Getting Heart Attack? Here is Everything You Need To Know

How to Revive the Lapsed Life Insurance Policy?

What happens to joint life insurance after divorce?

What Is Insurance Rider and It’s Benefits?

Types of Life Insurance Or One Investment, Many Options

Life Insurance for Overweight Applicants

First Job? Here’s Some Tips on How to Manage Finances

Adding A Child to Your Life Insurance Policy?

Compare Different Life Insurance Products Offered By Kotak Life

How To Choose The Right Life Insurance

Is Life Insurance an Investment?

What is the Difference Between Limited and Regular Pay Insurance Plan?

7 Superficial Reasons People Avoid Buying Insurance Online

All You Need to Know About Life Insurance - Its Benefits, Features, and Types of Life Insurance

Guidelines for Linking Aadhar and PAN to Insurance Policies

What Is Financial Planning?

What is the Difference Between Insurance and Reinsurance?

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

What Is Surrender Value (Cash Surrender Value) in Insurance and how is it calculated?

Voluntary Life Insurance Policy Vs Group Life Insurance

Important Factors to Consider While Choosing the Right Term Period for Your Term Insurance Plan

Role of IRDAI in the Insurance Sector

Does Life Insurance Cover Terminal Illness?

What is Group Insurance?

All about IRDAI

What is Minimum Life Insurance Policy?

What is Sum Assured in Endowment Policy?

5 Benefits of Gifting Life Insurance Cover to Your Spouse

Types of Life Insurance Policies in India

Guide for Buying Online Term Insurance Plans for Senior Citizens

Life Insurance for Overweight Applicants

A Step-by-Step Guide: How To Make An Investment Plan?

What is Life Insurance?

Term Insurance Tips for NRIs in India

5 Things to Consider Before You Buy Life Insurance