Top Myths and Facts About Life Insurance You Must Know

A life insurance policy is the best way to ensure your family's financial security in the face of an unfortunate event. However, many people often hesitate to purchase a plan because of many misconceptions and false information they have heard from their friends, relatives or acquaintances. The following article will bust some common myths regarding life insurance policies and present facts to help you gain knowledge about different aspects of a life insurance plan and consequently make a sound financial decision.

Top Myths and Facts About Life Insurance You Must Know

Here are some common myths and facts about life insurance policies that everyone should know.

Myth - A life insurance policy is useful only after life assured’s death.
Fact - Along with acting as a financial safety net for your family, some life insurance policies also provide additional benefits to the life assured. For instance, ULIPs offer dual benefits of live coverage and investment opportunities, while an endowment plan offers a life cover and savings as a twofold advantage. Other than these, child insurance plans and retirement plans help plan a better future for your children and yourself. Moreover, the tax benefits are also provided on payable premiums under Section 80C of the Income Tax Act.
Myth - There is no need to compare different policies. You can purchase the one recommended by your friends and family.
Fact - It is important to thoroughly compare different policies offered by various companies to choose the best option for yourself. Every family has their distinct needs; hence, it is wise to purchase a customized plan rather than a plan suggested by your friends and family.
Myth - A homemaker does not need a life insurance policy.
Fact - A homemaker's job is to run the house efficiently. From cooking, cleaning the house and raising the kids to managing the house's budget, the homemaker's work is equally essential as the employed spouse. Suppose something unfortunate happens; in this case, the cost of keeping a domestic help or a caretaker can cause a financial burden for the family. Here, the right insurance policy can help mitigate such costs through the offered death benefits.
Myth - You cannot purchase a life insurance policy if you have a pre-existing illness.
Fact - It might be challenging to get a life insurance policy if you have a pre-existing illness, but it is not entirely impossible. The insurance might increase the premium rate according to the risk evaluation report. Moreover, it is advisable to disclose every necessary detail about your condition to get the best plan for yourself.
Myth - You do not need a life insurance policy if you have group life insurance provided by your employer.
Fact - A group life insurance policy will provide coverage according to your salary and position in the company. Moreover, you won't be able to turn the group life insurance policy into an individual life insurance policy if you plan to quit your job. Hence, separate life insurance should be purchased that will meet your distinct needs and requirements. Furthermore, you can have additional rider benefits when you buy a personalized plan.

Take Away

The above facts clear various misconceptions people have regarding life insurance policies. Hence, you must not fall for misinformation and lose the opportunity of providing a financial safeguard to your family, which will help them sail through testing times after your demise.