Scared of taking life insurance? Ten reasons why you shouldn’t be

Jan 29, 2018 | 1 year ago | Read Time: 3 minutes | By iKnowledge Team

As young individuals we think life insurance is only for our parents; but that’s a myth

Deciding to invest in a life insurance plays a vital role in your overall financial plan. Yet, only 10% Indians go ahead and buy it. Reason? Most of us feel life insurance is only for the old. Thus, myths like these stop us from securing our loved ones’ and our financial future. So, let’s get started with busting the unfounded rumours that do the round:

Life insurance provided by the employer is enough

The life insurance plan provided by your employer does not cover all the bases. The payout of a group life insurance scheme is very small (about twice your basic salary). This may be too low to sustain your family at a time of crisis. Besides, your group insurance benefits stop the moment you leave your job. Hence, you should always buy your own personal life insurance.

Only the earning member needs life insurance

Even a stay-at-home spouse needs life insurance. Here is an example: Suppose you are the earning member and your spouse takes care of your household. But what if, unfortunately, your homemaker spouse passes away? After such a personal loss, you might have to hire a 24/7 domestic help to look after your household. This also means more expenses. Your stay-at-home partner’s life insurance can help you bear post-bereavement expenses. You also receive financial help.

Life insurance is useful only after death

 True, a life insurance product does shield your family against financial odds in your absence. But life insurance offers a host of other benefits as well. It helps you build a corpus for yourself. It also sees you through medical emergencies and ensures a comfortable retired life.

Single individuals with no dependants need no life insurance

No one wants to die, leaving a debt behind. Even if you are single, your life insurance would help cover your medical bills. It would also take care of any debt you may have had. You also get the choice to donate the amount to charity.

It is only a tax-saving instrument

You buy life insurance not only to enjoy tax exemption. You need it to provide your family with financial security and to build a corpus for yourself. Aegon Life’s iTerm plan gives you the option to receive up to Rs 1 crore in return.

Life insurance is expensive

You often overestimate the price of life insurance—pricier than your life! You think it is sky-high when it actually is not. Aegon Life allows you to pay as low as Rs 8,100 per annum for an assured sum of Rs 1 crore.

No life insurance for the elderly

Many senior citizens believe that life insurance is available only for younger people. But several financial institutions cater to the life insurance needs of older individuals. You might have to pay a higher premium for it. You can fish out the best deal with a little bit of fact-finding.

Health issues make you ineligible for life insurance

A common misconception is that individuals with health issues cannot insure themselves. It is time you scrapped that myth. Term life insurance is available for everyone. Some companies even cover high-risk cases. Individuals with diabetes, cholesterol, and arthritis will have to pay a higher premium but can still get covered. You can read up on Aegon Life’s iTerm plan. This plan provides terminal illness advantages too.

Young and healthy means no need for life insurance

 It is quite the contrary, and you should go for life insurance at an early age. The younger you are, the lower the premium on your life insurance will be. You might develop ailments later in life and end up paying a higher premium.

Life insurance is better than health coverage

These two types of insurance cover two different life crises. While your life insurance protects your life, it does not cover your regular medical expenses. These expenses include hospital bills, regular health check-ups, and treatment costs. Health insurance helps you out in a medical emergency.

The bottom line

Not having life insurance could prove disastrous for your family later. So, ignore the merchants of myths and take a life insurance to cushion future family crises.

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