Life Insurance: Myths And Facts You Must Know

Life Insurance Myths And Facts ?

Here are a few important and interesting myths and life insurance facts that give a better insight into life insurance.?

Myth - Life insurance is only for the elderly. ?

Fact - Life insurance is for people of all ages. It provides the lump sum death benefit to the family in the event of the unexpected death of the policyholder, which can be used to clear off debts, plan for future family financial commitments, etc. ?

It is best to buy life insurance when you are young and healthy, as premiums are lower. The younger you are, the lower the risk to the insurance company and the lower the premium. Also, customizable life insurance plans such as certain Tata AIA policies help individuals increase the sum assured based on the different milestones and increasing financial commitments in the family.?

Myth - Life insurance is only for the breadwinner of the family. ?

Fact - Everyone should have life insurance regardless of their role in the family. ?

For example, a housewife takes responsibility for several household chores such as cooking, cleaning the house, taking care of children, etc. In their absence, the other family members have to take care of these responsibilities. Therefore, it can lead to a financial obligation that can be met by some of the best life insurance policies customized for individual financial needs. ?

Myth - Life insurance is expensive. ?

Fact - Life insurance is more affordable than individuals think. Premiums depend on factors such as age, health condition, sum assured, etc. Policyholders can also pay monthly, quarterly, or annual payments for the life insurance policy based on their convenience.?

Myth - Life insurance benefits can be useful only after the policyholder's death.?

Fact - The primary purpose of life insurance is to provide financial protection for the family loved ones in the event of the policyholder's death. However, life insurance policies also offer additional benefits, such as add-on riders that can be used during the policy tenure. For example, it provides additional financial support for paying medical expenses if the policyholder is affected due to a critical illness such as cancer.?

Myth - Life insurance cover provided by the employer is sufficient.?

Fact - Employers only provide a limited amount of coverage. Considering the financial responsibilities and liabilities, it may not be enough to secure the family in the event of the unexpected death of the policyholder.?

Myth - Life insurance can only provide death benefits.?

Fact - Comprehensive life insurance plans can provide savings and investment benefits apart from the life cover. Therefore, the policyholders can ensure a guaranteed return or market-linked returns as a maturity benefit with the life insurance plan. The individuals can choose the period of investment, premium payment mode and payout mode to modify the product to tailor it as the best life insurance plan for their life.?

Myth - Life insurance is only for tax benefits.?

Fact - Life insurance provides tax deduction and exemption benefits under Section 80C and Section 10(10D) of the Income Tax Act. However, life insurance is primarily intended to provide financial protection for the family in the event of the policyholder's absence. The death benefit can cover funeral costs, outstanding debts, and living expenses. In addition, life insurance plans also offer additional rider benefits and the option to save or invest for the future. ?

Conclusion?

Life insurance is a crucial aspect of financial planning that provides financial protection to the family in the event of the policyholder's unexpected death. In addition, it provides add-on riders, savings and investment options. ?

However, many misconceptions and myths surround life insurance forcing people to refrain from purchasing it for the long term. Therefore, it is important to debunk the myths, realize the facts and make well-informed decisions.?