8 Myths Uncovered About Term Life Insurance
Term life insurance is one of the best kinds of life insurance available. It is affordable, yet comprehensive and allows you to cover your life at a low cost. This is a primary reason why everyone should buy a term insurance plans. Sadly though, there a few misconceptions about the term plans that make people stay away from them. Take a look at this article to debunk these myths and learn how to make the most out of your term plan cover.
Debunking the term insurance myths
Let us begin by looking at the top eight term insurance myths:
- It is very expensive: This is the most common myth about term life insurance. In contrary, term insurance is one of the cheapest forms of life insurance available today.
- It is difficult to get: The terms plans are widely available online these days and you can get them instantly in the most hassle-free manner.
- Single people don’t need a term cover: You may be single today, but in all likelihood, you will settle down and have a family in the future. It is therefore wise to get the term plan as a single person and continue to stay covered for the years to come.
- Term life insurance covers only for mortgages: Many people feel that a term life insurance plan is only suitable to cover a loan. While it is helpful as a mortgage protection, you need a term plan to secure the financial future of your family members too. Buy a term plan even if you do not have a loan in your name.
- Healthy people don’t need term insurance: People don’t necessarily die because of bad health – accidents and other unfortunate incidents also snatch away lives. So you need a term life insurance plan irrespective of your health condition.
- Investments are better than term insurance: While you don’t have a return component or a maturity or survival benefit in term life insurance, you cannot compare it with any investment tool. Investment and insurance have two separate motives and you need both for a healthy financial portfolio. So keep your investments aside and think purely about the insurance requirements when buying a term plan.
- A breadwinner needs term insurance: A housewife, who may not have a fixed salary, also needs term insurance. She takes over the roles of a tuition teacher for the kids, a cook, a household manager and a driver. Have you thought about the financial requirements needed to fill her roles if she dies suddenly? So it is a myth that only the breadwinner of the family needs term insurance.
- Term insurance is like any other life insurance: Term life insurance is a distinct form of life insurance. It is very different from the other types of life insurance like the endowment plans and the ULIPs.
Uses of term insurance
Term insurance is very useful. First and foremost, you can cover your life and build up a corpus for your family if you die suddenly. You can do this at an affordable rate, without impacting your bank account too much. Term insurance is also used to cover mortgages. If you die without repaying a loan, the death benefit will be used to pay the dues. Your loved ones won’t be harassed in any way thereafter. Term insurance also works as an effective income replacement option in your absence. If you choose the right kind of cover and opt for the staggering pay-out option, your spouse and kids can get a regular monthly income similar to your salary.
Coverage and additional benefits
There are many additional benefits such as tax rebates that you get when you buy a term life insurance plan. You also get to choose riders and make your plan all the more flexible. The online term plans are cheap and easy to get, and more important you get to compare them before you buy. This helps you to find the best coverage at the best rate. So what are you waiting for? If you thus have believed the term insurance myths so far and stayed away from the plans, it is time for you to make some changes. Go right ahead and buy a good term life insurance cover and secure your family’s future in an easy and affordable manner.