Life insurance is one of the hardest and most confusing policies to understand. This has led to a great spread of myths that make nonsensical sense to most potential policyholders. Hence, it’s essential to uncover these myths and understand them so as to not make bad decisions over your life’s finances.
Common myths associated with life insurance
The most common myth is that life insurance is too expensive for the average person. However, there is truly a more affordable option for any budget. The term plan can be bought, which provides coverage for a certain amount of time, usually cheaper than whole life insurance. Another myth is that life insurance is only for adults. On the contrary, the earlier you start a policy, the better because the premiums are lower when you are younger and presumably healthier.
Reality of the myth
Believing in these myths might have serious repercussions. For instance, failure to consider life insurance because you feel it is costly will leave your loved ones exposed and nearly at the mercy of the capital by close people to you. On the other hand, assuming that when you are older, you do not need it might result in paying more for the premiums later on or even get turned down from cover upon the onset of health issues
Do you know that above 75% of Indian population remains uninsured or less covered? This stands well as one of the emerging reasons for increased awareness about life insurance.
Importance of Insurance to all age groups
Insurance is essential to any individual, regardless of age. It does not cater only to married people and parents. A working student may not have a family to rely on his income, but debts like student loans and mortgages already weigh him down, and these become even a burden for his family if he dies unexpectedly. Moreover, with an increased life span, the savings meant for life insurance can also be used to pay for his medical needs at old age, making him feel more secure.
Reviewing your personal insurance needs
One needs to review and evaluate his life insurance requirements as time progresses with the changing of one’s life situation. Changes in one’s life situation can include marriage, having children, or getting a new job. These changes result in changes in the management of assets and cause responsibilities in finances to rise. A regular review is essential to ensure that it goes along with the real situation.
An Indian story
Life insurance is a product that Ramesh, an IT professional from Bangalore, understood as something he didn’t need and was too expensive. Thanks to one such financial literacy workshop, he could understand the importance of term insurance. He opted for a policy and thereby ensured their future. Years later, when everyone was least expecting, Ramesh died. It was then seen that it was only to provide for the family, which would give them enough money to clear their house and to continue to study. So, one can really say that even a small investment in life insurance can make quite a difference.
The realities of life insurance dispel all myths surrounding it. Be informed, assess your needs periodically, and make choices that will benefit you and generations to come by recognizing its value at any age.
