In a life insurance plan, the insurer pays a sum assured called ‘death benefit’ to the beneficiary/nominee, if the insured dies within the term of the policy. The insured has to pay premiums periodically to keep the policy active. Unlike Term Insurance, Endowment Life Insurance offers cash value if the insured wishes to surrender the policy or the insured survives the term of the policy. Premiums are invested in fixed income securities to offer maturity value. You would be paid cash value if you surrender the policy.
As with other financial products, Life Insurance policies too have myths. Let’s have a look at top myths and facts on Life Insurance you must know:
Want to know more on Term Life Insurance? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
This is wrong. The amount of work that a stay-at-home spouse does is huge! It is very expensive to hire someone to do all the household work that was being done by stay-at-home spouse. At the same time, it is a herculean task to do all the household work and then report to office. With the life insurance money, you could spend on children’s education and give them a better quality of life.
You still need to avail an individual Life Insurance Plan. This is because your company’s group Life Insurance Policy stops when you change your employment. Group Life Insurance Policy covers only the basic needs and the benefits of group policies are very limited, which may not be enough to cover your family’s needs.
SEE ALSO: Insurance Tax Benefits For Women
It is advisable to avail an insurance policy that is 15-20 times of your salary. The money must be enough so that family lives in reasonable comfort and debts like home loan or a car loan are repaid.
The main purpose of you availing a Life Insurance Policy is to cover your family’s financial needs when you are not around. If your investments don’t serve the cause, then what’s the use? It’s good to avail a term life insurance plan for risk protection and invest the rest in equity or debt according to risk profile.
No, you can still be insured. The premiums payable would be higher depending on your health conditions. This is because the insurers may be ready to bear higher risks for high premiums.
Not really. Yes, Life insurance would give you tax benefits but the basic and foremost reason for availing a Life Insurance Policy is to secure your family’s financial needs when you are not around.
SEE ALSO: Know Endowment Life Plans
Life Insurance Policy would give a lump sum amount as ‘death benefit’ to the beneficiary on demise of the insured, within the term of the plan. You can always surrender your policy if it doesn’t match needs. It’s good to surrender early, rather than towards the end of the plan.
It’s good to avail a Life Insurance Policy at a young age as there would be minimal health related issues and you will be able to get policies at lower premiums. You are single now with no dependants. A term plan would benefit your family post-marriage. Be wise and avail Life Insurance at a young age.
SEE ALSO: Insurance Tax Benefits
This is wrong! Health Insurance is equally important as it provides coverage for illness. You can avail critical illness riders with Life Insurance Policies. Avail a standalone critical illness plan, even if you have life insurance.
In the modern World, it is important to understand the importance of Life Insurance and how it works. You need to be financially aware. It is crucial to financially secure your family’s future. Investments are good, but at the same time you need insurance to protect family on an untimely demise.
You May Also Watch:
Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.
Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.
Be Wise, Get Rich.
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.