Myths About Life Insurance Riders Busted

Life insurance protects a person's loved ones financially in the event that he or she dies. However, basic life insurance plans may not provide all of the coverage that a person requires. A person may be able to add one or more policy riders to improve coverage. Some riders are even covered by some insurance policies but not by others.

A rider policy's main purpose is to offer coverage when a conventional life insurance policy's coverage is limited. In some cases, personal accident coverage, in addition to a life insurance policy, may be necessary. Rather than purchasing a new policy, the individual has the option of combining an add-on insurance coverage with a term policy. To find out more facts on life insurance riders, read on.

Myths Busted - Life Insurance Riders

Following are some of the busted myths about life insurance riders -

MYTH 1 - A life insurance policy is only helpful after the death of the life guaranteed.

• FACT - Some life insurance plans give additional advantages to the life guaranteed in addition to operating as a financial safety net for your family. For example, ULIPs provide both life insurance and investment options, whereas an endowment plan provides both life insurance and savings. Aside from these, child insurance plans and retirement plans might assist you in planning a brighter future for your children and yourself. Furthermore, under Section 80C of the Income Tax Act, tax advantages are offered on paying premiums.

MYTH 2 - There is no need to contrast various policies. You can buy the one that your friends and family suggest.

• FACT - It is essential to properly analyse various plans offered by various firms in order to select the best alternative for yourself. Every family has unique demands; thus, it is best to select a personalised plan rather than one recommended by friends and relatives.

MYTH 3 - A homemaker does not require life insurance.

• FACT - A homemaker's duty is to keep the house running smoothly. From cooking, cleaning, and raising the children to managing the household finances, the homemaker's labour is just as important as the employed spouse's. If anything tragic occurs, the expense of employing a domestic helper or a caregiver may become a financial strain for the family. In this case, the correct insurance coverage might assist alleviate such expenditures by providing death benefits.

MYTH 4 - If you have a pre-existing sickness, you cannot get life insurance.

• FACT - It may be difficult to obtain life insurance if you have a pre-existing disease, but it is not impossible. The insurance company may raise the premium rate based on the risk evaluation report. Furthermore, it is important to divulge every detail regarding your health in order to receive the finest strategy for yourself.

MYTH 5 - If your work provides group life insurance, you do not need a life insurance policy.

• FACT - A group life insurance policy will cover you based on your pay and position within the firm. Furthermore, if you want to leave your employment, you will be unable to convert the group life insurance policy into an individual life insurance policy. As a result, you should obtain individual life insurance to fit your specific needs and expectations. Furthermore, when you purchase a tailored plan, you may be eligible for additional rider benefits.

MYTH 5 - Hiding medical issues may result in a cheaper premium.

• FACT - This is not just a myth, but it is also harmful. If the insurance company learns about your illness or medical history later, they may consider it an instance of fraudulent misrepresentation and may terminate your coverage immediately. Furthermore, the insurer may refuse to pay the claim amount to your family after your death. As a result, you must give accurate and complete information on the policy proposal form. If you have a pre-existing condition that may raise your premium, you should accept it and pay the additional amount to guarantee that your family receives the claim amount without difficulty.

Endnotes

The information presented above dispels some myths about life insurance coverage. As a result, you must not be misled and miss out on the opportunity to provide financial security to your family, which will help them navigate difficult times following your death.

Do read - 5 key tips to choose an ideal life insurance rider

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.