A term insurance policy is a popular type of life insurance. It offers life insurance cover for a specific tenure. The reason behind its popularity is that it easily provides a sufficient sum assured at an affordable premium. Having a term plan ensures that, in case of your sudden demise, your loved ones will not face any financial turmoil. It ensures that in your absence, your loved ones can live a good quality of life. Also, it helps to repay any liabilities that you may have. If you are planning to buy a term plan, you might come across several myths surrounding the policy. Read further to understand the common myths surrounding term insurance and the reality of it.
Term insurance myths debunked
Myth 1: Considered a waste of money
Term insurance is pure life insurance, which offers life coverage for a fixed tenure. After surviving the tenure of the policy, the policyholder does not receive any maturity benefits. Several individuals hesitate to buy term insurance because of this factor and consider it a waste of money. However, the contrary is true. The purpose of term insurance is not to provide returns, since it is not an investment. Instead,it is a tool of security that ensures that in case you suddenly lose your life, the financial needs of your family needs will be taken care of. It is essential that when you are buying a term plan; you know the purpose behind it. If your purpose is to secure your family, paying premiums would not be considered a waste of money.
Myth 2: Term insurance is expensive
There are several types of life insurance available, and each has different premiums for the same coverage. This is because each type of life insurance has distinct features and benefits to offer. The myth that people have about term insurance is that it is expensive. However, the myth is contrary to the truth here. Term plans are popular for being affordable life insurance policies. They easily offer sufficient coverage at an affordable premium. An affordable premium allows the policyholder to get a secure life cover without worrying about the payment of hefty premiums. It also allows them to get sufficient coverage to secure the needs of their family. You can use a term insurance premium calculator to get an estimate of the premium you need to pay for getting your desired coverage.
Myth 3: Single individuals do not need a term policy
Individuals usually procrastinate on buying life insurance, assuming that it is essential for the later stage of life. When you are single, you might wonder about the need for a life cover when you have no responsibilities and liabilities. However, things change drastically when you start a family. You will have individuals who will depend on you and might even consider taking a loan to lead a better quality of life. Buying life insurance while having so many financial needs can be difficult. Also, the older you are, the more expensive it is to buy a term plan. This is because age is one of the key factors that insurance companies take into consideration while calculating your premium. Instead, it is much more convenient to buy term insurance at a young age where you can lock a vast sum assured for a minimum premium.
Myth 4: Term insurance plans cannot be customised
The basic idea of having a term plan stands true because it offers term insurance for a fixed duration. However, it has a lot more to offer along with its basic plan. It is a myth that you cannot customise your term plan according to your needs. You can choose rider options with your base insurance, like critical illness rider, accidental death benefit rider, and several more. You do have to pay additional premiums for the additional riders that you buy. You can get an estimate of the premium by using a term insurance premium calculator. There are also several types of term insurance plans you can choose from. Apart from the basic plan, you can buy an increasing or decreasing term plan, return of premium option, or even the life stage benefit option. It is essential that when you buy a term insurance policy; you know about the different options available.
Knowing about the myths of term insurance provides further clarity on what exactly term insurance plans have to offer. Ensure that when you purchase a term policy, you compare different plans and read the fine print of the plan you choose to buy.