We are living in unprecedented times, life has become so unpredictable these days. The last few months have been an eye opener for a lot of us, making us realize the value of life. A lot of youngsters who were wary of buying a life insurance are now more open to this idea. However, there are still some myths about life insurance that make it a less preferred choice.
Let’s look at some of these, so that you can be aware and make an informed decision
1. Life Insurance is Not for Young Individuals
A lot of youngsters today believe in the ‘You Live Only Once’ philosophy. Hence, a common assumption is that it’s better to buy life insurance in the later years and use their current savings for their immediate needs.
This couldn’t be farther from the truth. It’s true that the health risks increase with age and the younger one is — the healthier they are. However, buying life insurance at a young age can be a lot more beneficial because of the lower risks. Life insurance premium costs are lower for a young individual because of two reasons:
- One reason is that policyholders are in their prime health, hence the risks are lower.
- Secondly, a young person is likely to buy a life insurance plan for a longer period
Hence, you can get a large cover at affordable rates if you start investing early.
2. Life Insurance is useful only in case of an unfortunate event
This is among the most common myths about life insurance plans that it offers benefits after the insured passes away. This is not accurate. While term plans provide financial support in case of an unfortunate event, there are other kinds of policies available to meet the varying needs. Life insurance can be broadly divided into a pure life insurance policy and a life insurance — investment plan. Whether your goals are security or wealth creation, you can opt for a pure term policy, or a savings and investment policy, both of which are advantageous in their own ways.
3. Buying a life insurance plan is costly
Insurance policies today offer extensive coverage at reasonable prices. You can research online for customized plans that suit every budget. You can start with a lower sum assured and then build up additional coverage as your income increases. You can also opt for a term life plan. Term insurance typically provides a large sum assured for a low premium.
4. Life insurance is only for tax savings
Tax deduction under Section 80C^^ is not the only advantage of life insurance. In your absence, the payout from your life insurance will also cover the monetary needs of those who are dependent on you. If you opt for a savings or investment plan, the maturity benefits from your insurance product can act as a corpus for many future financial goals.
5. Individuals with Pre-existing Illnesses Can’t Buy Life Insurance
This is among the most common myths about life insurance. The assumption stems from the fact that one’s age, health, and other habits do determine how high their premiums will be. However, there is no restriction on who can buy life insurance.
Many factors affect whether or not one’s pre-existing illness will drive up their life insurance premiums.
- For one, an insurance provider will carefully look at their medical history.
- Another criterion is how long they are applying for coverage.
- It is crucial that the policy applicant shares both relevant and correct information during their application process. This will prevent any unpleasant surprises from getting in the way of one’s application process.
Buying a life insurance is a very important financial decision, it is a stepping stone in planning ones finances and securing our loved ones. Hence, it’s important to do a thorough research and not rely on hear-say for such crucial decisions. Kyunki agar tyari sahi ho toh jeet pakki hai – In association with ICICI Prudential Life Insurance
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