Ever wonder why individuals are hesitant to acquire term insurance? Is it because they think it is too pricey or unnecessary? Let’s look at some prevalent illusions concerning term insurance plans in India, especially the popular 1 crore policies, and refute them one by one.
- Term Insurance is too expensive
Many individuals think that term insurance plans are expensive. However, term insurance is one of the most cost-effective forms of life insurance. For instance, a 30-year-old non-smoker can secure a 1 crore term insurance plan for as low as Rs 500 per month. The premium differs with age, health, and lifestyle but is cheaper than whole life or endowment policies.
- I don’t need term insurance if I’m healthy
As much as it is good to be healthy, term insurance cannot be done away with. It is equally important to note that no one is immune to accidents or sudden illnesses. Term insurance guarantees that your family will be financially secure in the event of your death, irrespective of the state of your health at the time.
- Term insurance only provides death benefits
There is a misconception that term insurance is only for providing death benefits. But today’s term insurance plans come with such options as critical illness rider, accidental death benefit, and waiver of premium. These add-ons can help meet financial needs in the event of severe health complications or disability.
- My employer’s life insurance is sufficient
The majority of employees depend on the life insurance offered by their employers. However, these policies are often not comprehensive, and you may find that they do not meet your family’s financial requirements. One should always have a personal term insurance plan which gives enough coverage like a 1 crore policy.
- Term insurance is only for breadwinners
Another misconception is that only the primary earning member of the family needs term insurance. Other groups that require coverage include homemakers and non-earning members. It results in a financial burden by having to hire help or coordinate tasks within the household.
- Young people don’t need term insurance
It is a common misconception among young people that they do not require term insurance. But, if one buys a term insurance plan early in his/her life, he/she can freeze low premiums. Also, it provides for your family’s financial well-being from a young age.
- Term insurance has no maturity benefits
Indeed, traditional term insurance plans do not offer maturity benefits. However, some plans now return the premiums if you live past the policy period of the policy. This means you get back the premiums paid, meaning it is a good thing for everyone involved.
- Claim settlement is a hassle
Some people are afraid that taking the term insurance amount is complicated. However, established insurance companies have made their claim procedures easy to follow. The Insurance Regulatory and Development Authority of India (IRDAI) also regulates the timely settlement of claims.
- Term insurance is only for high-income individuals
It is a misconception that term insurance is only for the affluent. Term insurance plan is meant to be cheap or economical for all individuals. It is still possible to get plans that offer adequate coverage regardless of the level of income.
- Women don’t need term insurance
This is because gender biases cause people to believe that women do not require term insurance. Women also work for the household and their absence can be costly. Today, most insurance companies have developed specific insurance programs for women.
- Term insurance is a waste if I outlive the policy term
Many people think that term insurance is a waste if they survive the policy term. Term insurance is mainly used to provide financial security. The comfort of knowing that your family is insured is worth more than the price that you pay.
- Term insurance plans are rigid
Many people have the impression that term insurance plans are rigid. However, most plans are flexible in allowing the policyholder to add on features to enhance coverage during critical life events such as marriage or childbirth.
- Online term insurance plans are not reliable
Some think online term insurance plans are less reliable. On the contrary, purchasing insurance online is secure and can be more affordable in most cases. It also makes it possible to compare various plans to arrive at the best term insurance plan for 1 crore or any other amount.
- All term insurance plans are the same
There’s a misconception that all term insurance plans are identical. Both plans have their distinct characteristics, advantages, and optional add-ons. This makes it necessary to compare policies and identify the most suitable policy based on individual needs and financial plans.
- I can’t buy term insurance if I have pre-existing conditions
Most people think that they cannot get term insurance if they have a pre-existing health condition. Even though they might result in increased premium rates, most insurance companies still provide insurance for such conditions. It is important to be as open as possible during the application process.
- Term insurance requires extensive medical tests
The idea of going through numerous medical tests puts off some from purchasing term insurance. However, many insurance companies provide the policies with minimum or without any medical examination, especially to those who are young and in good health.
- It is difficult to understand term insurance policies
The language used when explaining insurance policies can be quite complicated. However, insurers offer policy documents and assistance to ensure that the client comprehends the policy’s terms and conditions. In any case, it is always wise to consult the insurer or a financial planner.
- Switching term insurance plans is not possible
Many individuals believe that they cannot change the term insurance plan once they have bought it. Of course, the fact that switching can be difficult does not mean that it is impossible. However, if you find a better plan, you can transfer your policy to another insurance company, which may have some formality.
Ending note
Term insurance is one of the most important financial instruments for securing your family’s financial future. It is important to understand and demystify these myths to make sound decisions. Whether you are searching for the right term insurance plan which offers coverage of 1 crore or are interested in other plans, it is crucial to distinguish between fact and myth. This way you will be able to obtain a policy that will afford you the much-needed security for your family. Therefore, these myths should not discourage you—go for a term insurance plan that meets your current requirements!
