Term insurance plan happens to be the simplest and most affordable life insurance product available in the market. The policy is known to provide financial security to your dependents if anything were to happen to you. However, despite the simplicity of the product, there are several myths about term insurance, making people hesitant to buy the policy.
Below we have busted some popular term insurance myths so that you can proceed to buy the policy worry-free.
- Term insurance cover of Rs. 1 Cr is enough
Most people think that buying an extensive term insurance coverage of Rs 1 Crore is enough. However, in reality, the term insurance cover you opt for should be determined based on certain factors. Before you choose your term insurance cover, answer the following questions:
- What is your current financial status?
- What are your monthly expenses?
- What are your future financial objectives?
- Do you or anything in the family have health issues?
- Do you have a health insurance cover?
The answers to these questions will help you evaluate your current financial scenario. Based on it, you can proceed to buy a term insurance plan that fulfils your needs. Ideally, the term insurance cover should be 12-15 times more than your current annual income. It should be sufficient enough to cover the expenses of your family members in your absence.
- Term insurance plans only provide death benefits
The basic term insurance plans are known to provide death benefits only. However, insurers in India allow you to enhance the scope of the policy with rider benefits. Now, if you are looking to earn maturity benefits on your term plans, consider buying term insurance with return of premium cover.
With this rider benefit, the insurer will repay the premiums paid towards the policy if you outlive the term. Besides this, you can choose from a wide range of rider benefits available in the market.
However, note that each add-on cover you choose will increase the overall term insurance premium amount. You can use the term insurance calculator to determine the cost of your policy based on your desired coverage and rider benefits.
- Single people do not need to buy term insurance
It is correct that single people have little to no financial liabilities. Moreover, they have minimal family responsibilities. However, if your parents are financially dependent on you, it is best to buy a term insurance plan. That way, if anything were to happen to you, your parents will be financially secure.
Besides, buying term insurance at an early stage means you will be able to secure affordable premium rates as compared to purchasing term insurance in your 30s. Moreover, the policy provides attractive tax benefits for someone who is just starting their career and looking to save money on tax.
In The End
As mentioned earlier, term insurance is the purest form of life insurance cover available in the market for a nominal price. In fact, you can get in touch with your insurer and get your doubts resolved before buying the policy. So, don’t let misconceptions surrounding the term police stop you from securing your family’s financial future.