Life Insurance Policies have been around for a long time. Yet, there are many myths associated with them which prevent many from taking advantage of these policies. Here we have endeavoured to debunk the top 6 myths about Life Insurance Policies to help you take an informed decision while buying a Life Insurance Plan.
Only Investments are important, Life Insurance Plans are not
Yes, investments are essential. But what if something happens to you before you reach your investment goals? In that case, a Life Insurance Policy’s claim amount can ensure your financial goals get fulfilled.
Investments don’t pay out in case of death, disease or disability. Life Insurance Policy does.
Life Insurance premiums increase with age
Most people think that their insurance premiums will increase as their age increases. How it works in practice is if you buy a new Life Insurance Policy at the age of 45, you have to pay a higher premium compared to 25 years old. However, if you buy a Life Insurance Plan at 25 years of age, your premium remains the same for the entire policy term.
Buying a new Life Insurance Policy is expensive at a later age. An existing Life Insurance Policy will not increase your premiums as your age increases.
People who are single don’t need Life Insurance
Even if you are single, it is possible that you might have liabilities. What if you have a Student Education loan and an unfortunate event occurs? The burden of paying off your debts will fall on your loan’s guarantor.
The other reason to have a Life Insurance cover is if you have dependent family members, the Life Insurance Policy pay-out will replace your income in your absence.
Even if you are single, you need Life Insurance to pay off your liabilities and replace your income in your absence if you have dependent family members.
You don’t need Life Insurance Policy if your company has covered you under their Group Life Insurance Plan
Calculate the amount of coverage your employer currently offers. Is it enough to provide for your family in your absence? Usually, the answer is no!
When you stop working with your employer, you will have no insurance coverage. At that point, you might or might not qualify for insurance coverage or the Life Insurance Policy premiums could be very high.
Always buy your own Life Insurance Policy. Treat the life cover offered by your employer as an added bonus.
Life Insurance Companies don't pay claims with ease
A Life Insurance Policy is a legal contract. If your claim meets the policy’s terms and conditions, the Life Insurance company is bound to pay out your claim.
Most Life Insurance claim payments get delayed because the paperwork is not in order. Life Insurance claims have been paid out within 15 working days when the claim is payable and the paperwork is in order.
If your Life Insurance claim is payable and the paperwork is in order, Life Insurance Companies have no reason to deny your claim.
A whole of Life Insurance Policy is a waste of money
Whether a whole of Life Insurance Policy is a waste of money or not depends on an individual’s needs. A whole of life cover can provide income for a surviving spouse.
When you are 65 years of age and your Term Life Insurance Policy has ended, buying a life cover to secure your spouse's future can be very expensive. Your health conditions also might not be in the best of shape.
Buying a whole of life policy at a young age ensures that your spouse will be financially secure for the rest of their life.