Life Insurance: Myths And Facts

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Life Insurance: Myths And Facts
Nirmala Konjengbam - 30 July 2019

A lot of us tend to ignore buying life insurance. And many are still ignorant about its importance. However, while evaluating the importance of the same, the more we say is less. Its extremely important to opt for life insurance and it also forms a crucial element of sound financial planning.

Our family members are our world. We all work hard, plan long to make their life more comfortable and bring them more happiness. However, demise of a bread winner could leave them vulnerable to various financial crisis including debt, lack of expenses for sustenance and others.

Life insurance is the most potent tool to prepare for such adversities. A life insurance provides financial assistance to the family of insured after his or her death. A right insurance plan will help to achieve financial goals and secure ones future. However, the low penetration of life insurance into Indian market highlights that people still do not fully appreciate the product.

One of the major reasons behind all of this is most people considering buying life insurance plan is a waste of money.

It’s time to broaden our knowledge on various life insurance plans and understand the basic concept of insurance. Over time, insurers have came up with innovative products to meet different sections of customers on the basis of trends. Life insurance plans offer pure risk cover, investment, saving options and periodic returns.

According to requirement one can decide to choose what plan is suitable for them. Lack of understanding often lead to misconception about the life insurance.

Some of the most common myths and facts about life insurance are listed below:

Single and young

At these stages of life, one may think that insurance is not at all important and may can skip it. Apart from misconception, lack of awareness also makes people ignore insurance. However, this is the right time to buy life insurance to enjoy the benefits of compounding which comes with long term. On the other hand, it is better to buy health insurance when you are young and healthy by paying lower premium.

Life insurance is expensive

Many people assume and overestimate the cost of premium. For instance, if a 30-year-old non-smoker buys term plan for Rs 1 crore for 40 years, the annual premium would only cost around Rs 8508 and Rs 709 monthly.

Too old to buy

Life insurance is not only for young people. Even senior people and old customers can opt for life insurance. However, the product on offers are limited in market with the maximum entry age of 75 to 85years. Higher age brackets will have to pay high premium still one can buy it if they want to.

Group insurance is enough

Most working people did not buy life insurance thought they can afford it. They think the life insurance what they get from their employer is enough to provide financial security. It is highly recommended to buy individual life insurance to ensure enough financial security.

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