Insurance is considered an important part of financial planning for future security and peace of mind. Different insurance policies are available today, with term insurance being one of the most cost-effective.
A term life insurance offers financial protection for the family members in case of an unexpected death of the policyholder. It can easily be bought online after calculating the required premium range using a term insurance premium calculator.
However, even with this increasing popularity, many misconceptions about a term plan limit people from availing of its benefits.
Let’s debunk some common misconceptions about term insurance plans.
#1 Just an Expensive Investment
One persistent common misconception is the cost of a term insurance plan. People believe it to be an expensive investment option. However, a term plan is the most cost effective and affordable option compared to other life insurance policies. It provides Live coverage without investment or savings component, making the premium affordable.
#2 Not For Healthy Young Adults
People believe that having insurance like a term plan is not beneficial for young, healthy adults. However, age and health play a role in deciding the premium so young adults can enjoy a lower premium and the benefits of a term plan. You secure your life coverage in a cost-effective way.
#3 For Married People Only
Single people tend to overlook insurance policies in general. When it comes to a term plan, unmarried people believe it to be an unnecessary expense as they do not have dependents.
Term plan provides financial support to your family members, like your parents, in case of your untimely demise to help cover costs like education loans, car loans, and other expenses. Therefore, a term plan is not only meant for married people with a spouse or children.
#4 Limited to Death Benefits
Some people believe it to be an expensive investment with no guaranteed returns, as a term plan only offers death benefits to your family members if you die. That is not the case, as most insurance providers give you the option of renewal or conversion of your current plan to another plan in case you do not die within the policy tenure.
You can also explore rider options to make the most of your term plan as per requirements. So, on a positive outlook, it is a great investment option for your future in general.
#5 Limited Coverage
The term insurance policies are believed to be only beneficial for short-term cover. Depending on the policy choice, you get coverage for 30 to 40 years. Moreover, you can also benefit from policy renewal if you want to extend the cover period.
#6 Only Available for Breadwinners
Even though most people believe only breadwinners within a family can invest in a term plan, it is open to everyone. Whether you are a stay-at-home mother or a spouse who manages the house, you can easily invest in a term insurance plan.
This will help you cover any financial debts or liabilities under your name in case you suddenly pass away. Additionally, given that there is no other source of income for such family members, a term plan is a great investment option.
#6 Purchase is a Hassle
Another misconception about a term insurance plan is that the process is tedious and can take really long. With the digital world taking over, you no longer have to spend hours choosing a term insurance plan.
You can easily purchase it online from the insurance provider in a few quick steps, which require nothing but your information and documentation. This makes the purchase process extremely convenient.
A term insurance plan is one of the most affordable life insurance policies available in the country. Factors like your health, age and tenure can impact the premium you pay as an investment.
However, the key benefit of providing your family with financial stability and support in case of your untimely demise makes it a top choice. Debunking the above misconceptions is necessary to help you decide which term plan you should invest in. Assess your requirements and choose the right term plan for you and your family.