The Most Common Term Insurance Myths Explained
Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the security of your income continuing thru your life and in your absence throughout your spouse's lifetime!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability.

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.

Back

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

Term Insurance Quote
  • 12th Mar 2021
  • 1,725

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

In urban India, only three out of ten people buy term plans. Such low figures are mostly due to misconceptions about this pure-protection plan.

However, term plans are crucial to shield your loved ones against any shortage of funds in case of an unfortunate event. New-age term plans provide many other benefits too. Read on for explanations on some common myths around term insurance and make an informed decision.

Myth 1: Term plans are not useful because these do not provide maturity benefit

Reality:

If your loved ones depend on you financially, term insurance is vital for you. Since term plans involve no investment component, they provide extensive coverage at pocket-friendly premiums. The payouts can help your family to:

  • repay loan EMIs
  • fund children’s education
  • cover their living expenses
  • fulfil long-term liabilities such as children’s wedding

Further, return-of-premium term plans (TROP) refund the entire premium paid after the policy period expires. Also, some insurers allow converting a term plan to another policy type before maturity and get maturity benefits.

Myth 2: Term plans are useful only after the policyholder’s death

Reality:

Apart from buying a TROP, you can also add riders at a minimal price. Such add-ons provide the following benefits:

  • Upfront payouts on the diagnosis of critical illnesses covered under the plan, safeguarding your savings against the rising medical costs.
  • Payouts on permanent disability due to an accident, helping you tide over income losses due to disability.

Thus, term plans cover you against various unfortunate circumstances.

Another significant advantage is the tax deduction up to ₹ 1.5 lakhs available on the term insurance premiums under Section 80C of the Income Tax Act 1961,

Myth 2: Term insurance is not for single individuals

Reality:

You may have educational loans, car loans, credit card dues, or home mortgages. Also, your earnings might be your family’s principal source of income. A term plan will help your family avoid any financial burden and meet their expenses in case of an unforeseen event.

Moreover, some term plans allow you to increase your coverage in future. Thus, you can start with a low sum assured and increase the amount when your liabilities grow.

Buy Term Plan Now

Myth 3: A young and healthy individual does not need a term plan

Reality:

Like all life insurance plans, the sooner you buy a term plan, the lesser it costs. Hence, by buying at a young age, you can secure sizable coverage at an affordable price.

Moreover, life is unpredictable. India accounted for almost 11% of accident-related deaths worldwide in 2019. Hence, regardless of age, a term plan is essential to secure your loved ones against financial challenges.

Myth 4: ₹ 1 crore term plan is enough

Reality:

Inflation can eat away this amount purchasing power over time. Your life cover should be adequate to meet your family’s expenses. You need to consider the following factors before buying:

  • Your family’s current living cost
  • Future liabilities
  • Unpaid debts
  • Inflation

Myth 5: Buying term insurance is a hassle

New-age term plans are available online, allowing hassle-free, paperless purchases. Kotak e-Term plan is an online policy you can buy just by visiting the website. You can estimate the payable premium as per your chosen sum assured, fill the application form online, and pay digitally.

Conclusion

Term plans are cost effective financial tools that help you secure your family’s well being in your absence. Do not let baseless fallacies dissuade you from buying the coverage your loved ones need.

- A Consumer Education Initiative series by Kotak Life

Also read

    • 16th Dec 2021
    • 268

    Why Term Insurance Is Better Than ULIP?

    While term insurance is purely an insurance product, ULIP is a mixture of insurance and investment. Here are some points that will explain why term in...

    Read more
    • 5th Oct 2020
    • 932

    Why Should You Buy Term Insurance in 2022?

    Term insurance plan covers you against various risks & is surely cheaper & simpler than you think. Click the link for more information on term plan he...

    Read more
    • 22nd Dec 2021
    • 415

    What Should Be The Duration Of Your Term Plan in India?

    If you are looking to buy a term insurance plan, you must consider a few vital factors for choosing the proper term insurance duration. Click here to ...

    Read more

Related Plans

  • Kotak Term Plan

    Kotak Term Plan

    The Kotak Term Plan is a pure risk cover plan and an economical way of providing an adequate level of financial protection.

    Know more
  • Kotak Premier Pension Plan

    Kotak Premier Pension Plan

    Kotak Premier Pension Plan helps you accumulate enough wealth for your retirement, while you are earning sufficiently and also offers assured benefits...

    Know more
  • Single Invest Advantage

    Single Invest Advantage

    Kotak Single Invest Advantage is a hassle-free unit linked plan, where you invest once and reap the benefits throughout the policy term.

    Know more