The Most Common Term Plan Myths Explained3 min read
Experts suggest a term plan is a must have investment for all. And, if you are buying insurance for the first-time, you must be wary of the various myths associated with it.
If you are looking to buy an insurance policy, you may invariably do an online search to know about the different plans available in the market and choose the best one, right? But, remember over the internet there is a sea of information, and not all the sources are reliable. So, to help you make an informed buying decision, we list down a few common myths associated with term insurance and the reality behind it.
Myth 1 – Term plan does not provide any returns, and is not worth it
There are plenty of insurance policies that provide valuable returns as well as protection against life. However, when you buy a life insurance, you must decide whether you want a pure life cover or an insurance with a returns component. A term plan is the affordable insurance product that has the lowest premium with the highest sum assured. You can easily get coverage with a premium as low as Rs. 500 per month. Besides, you can also opt for add-on to get additional coverage. Thus, even if you don’t get any returns, a term plan is a worthy investment considering the financial protection it offers to your family in the event of an unfortunate demise.
Myth 2 – Claim settlement is a tedious process
This is a common misconception among people about term insurance. But, the truth is that the very reason why a term policy exists is to provide financial relief to the people during a crisis. Today, most insurance companies take utmost pride in transparency in their operations and providing customer-friendly services, including the claim settlement.
If you look at the CSR (Claim Settlement Ratio) of top insurers they all boast of a high number. So, if you comply with the settlement procedure and submit the necessary documents as required to support your claim, you can get your claim settlement approved faster. And, with the online process, it has become easier than ever before.
Myth 3 – Buying term insurance too early is not beneficial
The insurance experts worldwide have corroborated on one fact, i.e., – ‘it is never too late or too early to buy a term insurance policy.’ Besides, it makes perfect sense to invest in a term plan at a young age because when you buy a policy early, you can get a high coverage at an affordable premium.
Myth 4 – The sum assured of a term plan cannot be increased
Let us assume that you purchased a term plan of Rs. 25 lakhs when you were 25 years old. Eventually after five years, you get married and in a few years, you may have a child. So, it is natural that you will have an additional financial responsibility towards your family. So, you may want to increase your term insurance coverage, right? Well, you can increase the sum assured of your term plan at any time during the policy period as per your changing needs or financial standing.
Myth 5 – Insurance offered by employer is sufficient
Many people refrain from buying a term insurance because they think the insurance cover offered by their employer is sufficient. However, you must know that such policies often have limited coverage and benefits. Also, the insurance cover ceases to exist when you leave the job. So, it is advisable to purchase a term plan individually even if your employer offers a cover.
Thus, when you buy a term insurance, make sure to do your due diligence and take an informed purchase decision.