5 Term Insurance Plan Myths That You Must Avoid

Term insurance is a smart investment at any age.  A term plan is a type of life insurance that provides life insurance coverage for a set amount of time (hence the “term”). When it comes to life insurance the sooner you invest, the better. That being said, there are still many myths surrounding term insurance that may mislead people looking to buy.

Here are five myths about life insurance plans you shouldn’t fall for:

• Insurance schemes without return on investment aren’t worth it

Since term insurance plans only offer a death benefit, many people struggle to see the benefit. However, term life insurance offers some of the highest life coverage at the lowest premiums. For a minimal amount of money, a term life insurance policy will protect your loved ones from having to cope without you in the event of your death. So, although it does not provide any ROI on the premiums paid, it’s still a very smart move and has great advantages.

• All life insurance policies are the same

There’s a myth that all term life insurances are the same and that most life insurance companies in India don’t pay out on claims. Making use of a term insurance policy during a time of family crisis is ideal. If the term insurance policyholder does pass away during this time, your family will be provided with a lump sum amount so that your beneficiaries are protected. Life insurance policies are structured much differently and their payout on death benefits can be misleading and have multiple caveats.

• If you buy life insurance too late, it’s useless

While you should take efforts to purchase Canara HSBC OBC Life Insurance while you are still young and healthy because it keeps the premiums low, buying life insurance is never useless. If you are older and are looking to purchase life insurance, a term plan will allow you to take care of your loved ones while not having to pay the exorbitant fees associated with traditional life insurance policies.

• If you’re already covered at work, you don’t need to buy more life insurance

Many people receive life insurance policies at work but don’t take the time to read through the policy to see what it actually covers. Sometimes, the benefit payout will be inadequate for your dependents’ needs. Other times, the life insurance payout only occurs if the policy holder passes away under a set of conditions. And other times, the life insurance payout is actually given to the company itself, and not to the beneficiaries of the deceased.

• Online purchases for term life insurance can be tricky and untrustworthy

More and more insurance companies are seeing the benefit of moving their life insurance purchase options online. This is not to sell less valuable products, but to attract more customers. Buying term life insurance online is not only easier and done from the comfort of your own home, but it also provides all the same benefits and payouts.