Over the years, people had varying opinions regarding term insurance plans in India. In fact, it is one of the most misunderstood life insurance products. While a term plan is the purest life insurance plan available in the market, it is certainly not that popular.
The reason behind this is the myths that people have believed in all these years. Today, we are going to debunk the top five myths regarding term insurance plans in India.
- Single people do not need a term insurance plan
This is not true! Term insurance plans are a sound financial product for singles as well as people with families. In fact, you can pay off debts such as home or personal loans with a term insurance plan, even after your death.
Also, if you are a sole income earner in the family, your loved ones will be protected financially in your absence. So, whether you want to secure the financial future of dependents or take care of your liabilities, term insurance plans have you covered.
- One should be covered for their current income
As a matter of fact, you should be covered for your future income. So, having an insurance plan that offers coverage as much as your current income will not be sufficient in the coming years.
The term insurance coverage you need should be dependent on your current financial status, expenses, and future financial goals. It should also take into consideration the inflation rate, lifestyle changes in the future, and liabilities that you may have.
- One cannot buy term insurance after 50 years of age
You can buy term insurance plans up till the age of 65 years old. So, don’t worry if you just celebrated your 50th birthday, you still can buy a term plan in India.
However, it is highly advisable to seek term insurance at an early stage in life. Since you are much healthier in your 20s compared to your 50s, the premiums charged are quite low at an early life stage.
- Term insurance plans are expensive
Term insurance plans are the most affordable life insurance product available in the market. For instance, if you buy a term insurance plan at the age of 30 years old with coverage of INR 1 Crore for 30 years, the premiums charged will be approx. INR 8000-9000 per year.
- Term insurance plans only offer death benefits
Ideally, term insurance only offers death benefits to the beneficiaries of the policy after your death. However, to make the product a little more flexible, insurers in India offer rider benefits. Riders benefits in term insurance enhance the scope of the plan. You can choose riders for a nominal price over and above the existing term plan premium to enhance the coverage of your policy.
To Sum It Up!
If you are looking for an affordable insurance plan to safeguard the financial future of your loved ones, term insurance is a wise decision. You can also enhance the benefits of the policy with riders such as critical illness cover, the return of premium cover, accidental death benefit, and more.
Moreover, you can use the term insurance calculator tool to determine the premiums before buying the policy. When you think like an investor, it will be easier for you to choose the right financial instrument for yours and your family’s future.