In India, conversations about death are unspoken of. People feel uncomfortable accepting the finiteness of life and hence fail to acknowledge why proactive financial planning may be necessary for the family left behind. Even if we were to ask this question to you, probably you would respond by saying ‘I am too young right now to think about death’.
Apart from this, such conversations are often countered with views about faith in the divine, such that risks associated with life are often left in the hands of God. Such beliefs often lead to ignorance about Life Insurance as a support mechanism, and its ability to safeguard your family’s financial future, even in your absence.
Let’s start by tackling some of these common myths about Life Insurance you may have heard a lot of times!
Myth 1: Life Insurance is not affordable
Fact: The simplest form of protection plan, the Term Plan provides great relative value for the premium paid. For a small amount of premium, you get an extensive amount of life cover which is paid as lump sum. It will secure your family’s financial future and help them to meet their basic needs in your absence. The Life Cover with a Term Plan is at least 10 times the amount of premium paid towards the policy.
Myth 2: Life Insurance is for older people
Fact: Youngsters often believe that life insurance plans are crafted for people in their late 30s onwards. However, as we all know, death does not see age, gender, caste, or creed. It is advisable to get Life insurance coverage as soon as one starts earning, to secure the financial future of your loved ones. Life insurance companies offer a gamut of products such as Retirement Plans, Savings Plans, Wealth Growth plans, which can help you to create a corpus as well as offer life cover.
Myth 3: Group Insurance is Adequate
Fact: Most of the companies do cover their employees with a Group Insurance Plan. However, this policy is only effective until the person is working with the particular employer. Job change or termination causes cessation of cover, thus leaving a person devoid of life insurance. As well as the cover amount may not to sufficient to cover your family’s complete financial needs.
To avoid the downfalls of such uncertain circumstances, it is recommended to purchase an individual life insurance policy. This will safeguard the financial well-being of your family when you are not around.
Myth 4: I am Single, I do not require Life Insurance
Fact: You are in a great situation to get the benefits of Time Compounding on investments. Money invested today will earn greater returns as compared to the same money invested 5-10 years from now. You can begin by investing in Retirement plans and Wealth creation plans which will create a corpus for you while providing a Life Cover to protect your family.
Myth 5: Life insurance is only for bread winners
Fact: Life Insurance Plans do cover the risk associated with the Life of a breadwinner but we need to understand that the future of your children, the retirement years of your spouse need protection and risk coverage as well. Child Plans with payouts at regular intervals will help to secure your child’s future whether you are around or not, and similarly the Retirement plans can help your spouse as they near old age.