Myths that Constantly Deter People from Getting Term Insurance

May 11, 2023

Sometimes, life takes an unexpected turn and creates a major turbulence in your life, thus getting the right life insurance is the best way to guard yourself and your loved ones from eventualities. Getting term insurance is certainly the most cost-effective way to secure your life. The premiums on term insurance are fairly small while the sum assured is on the higher side (periodically up to Rs. 1 Crore). So why are people still so reluctant to buy a term insurance plan? Unfortunately, over the years, certain myths and misinterpretations have averted investors from profoundly understanding the benefits of the best term insurance plan. Let’s make an attempt to bust those prevalent myths.

Term Insurance is quite expensive:

It is possibly the biggest myth that deters seekers from considering a term insurance policy. The reality is that term plans deliver a higher amount of insurance coverage at quite affordable premium rates. Compared to other types of insurance plans, term insurance premiums are easier on the policyholder's pocket. The amount of premiums for term insurance also leans on the factors that are mentioned below:

  • Age of the policyholder
  • Sum assured
  • Policy term
  • Premium payment term
  • Other additional benefits that are included in the term plan.

All term life insurance plans are the same, they cannot be tailored:

As the dynamics of one's life do not remain constant so similarly, today, term insurance plans by any insurance provider can be customized to serve those needs. Policyholders are eligible to add riders like accidental death, critical illnesses, etc. to their term plan to make it more fruitful. Moreover, if you are reluctant to buy a pure term plan, you can go for the return of premium option, increasing or decreasing term life insurance plan, convertible term life insurance, etc. 

Group insurance is not practical:

Nothing can be more untrue than this. If God forbid you find yourself without a job or if you’ve been attempting some endeavors to phase down, you are left with no financial security during this time. Thus, it makes sense to buy a term plan cover for yourself and every family member.

 Term insurance only works to save tax:

Many people believe that term insurance is just a tax-saving tool that assists insurers make the most out of it. It is just fictional. Tax saving is one of the benefits of a term insurance plan. The primary benefit of a term insurance policy is to financially protect your family if life presents an unfortunate event in their platter. Hence, saving tax should only be counted among the benefits instead of seeing it as a preliminary intent of a term insurance plan.

Term life insurance plans are limited to death benefits:

Oftentimes people consider term life insurance either a waste of money or an added expense as it fails to provide any lump sum amount at maturity like other life insurance products available in the market. 

Don't forget that just because term life insurance plans do not offer a lump sum amount at maturity but it does not mean that they are not useful. Have you ever thought about what will happen to your loved ones if you meet with a disaster that leads to your death or permanent disability? It is where the importance of term insurance enters the scenario. If you estimate the coverage amount correctly, the money that your insurer will pay your family will be enough to assure they do not have to face any financial difficulty in your absence.

The claims for term life insurance plans usually get rejected:

According to the latest IRDA’s annual report, the average death claim settlement ratio of insurance companies varies from 85.3 to 99.07% for the last financial year. This justification is enough to debunk this myth and persuade you to get term insurance.

My company maintains group life insurance policy, thus I don't need to buy another one:

It is true that several companies present group life insurance coverage to their employees. And in such cases, people tend to think that it would be enough to tackle the uncertainties of their life. 

 Have you checked the coverage amount that an employer's group insurance policy brings? Would that money be sufficient for your family to get through the rainy days ahead, if you are not there to take care of them and manage their expenses? Furthermore, what if you want to switch jobs and your next company does not deliver such benefits? – did you consider such pivotal attributes? 

Even if you are covered under a group life insurance policy provided by your employer, it is always logical to get the best term insurance policy.

Buying term life insurance process is complicated and lengthy:

Many people try to run away from the responsibility of buying term life insurance because they assure the process of buying the best Term Insurance through an offline channel is quite long. It requires one to deal with a ton of paperwork and submit miscellaneous documents. 

Contrary to this belief, at present, it is quite feasible to buy the term insurance policy online from Policychayan. The process of buying an insurance plan is reposeful now. Don’t postpone this task more and buy the best policy from a dependable insurer today itself.

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