Insurance can assist you in securing your financial future. Several options are available to help you build a corpus that will allow you to be financially independent in retirement, cover exorbitant medical expenses, or build your wealth. Purchasing life insurance is a major decision that is frequently clouded by myths. Many people believe they do not require it. Here are some of the most common life insurance myths and the facts dispelling them.
- Life insurance is only useful after my death.
It is a common misconception that life insurance is only useful after someone dies. In reality, life insurance policies provide many other benefits that can be used to cover expenses if you become disabled or ill, rendering you unable to work.
- My company covers me. I don’t need another policy.
Only while you are an employee of a corporation is your employer responsible for you. Once you go or retire, the policy expires. The organization may terminate the policy or limit the benefits if there are financial difficulties. Purchase an independent policy that will let you maintain your standard of living while also providing financial security for your family in the event of your passing.
- I’m young, single, and healthy. I don’t need insurance.
Life insurance is most relevant when you have an urgent need for it. Even if you don’t feel that your present situation requires it, like many people are apt to believe, there are always risks and hazards that might occur without warning. The best time to buy a life insurance policy is while you are young since the premiums are lower, and you may get a lot of coverage for a small amount of money.
- Life insurance is expensive for me.
Life insurance premiums are adjustable to mirror your level of affordability. Premiums are generally inexpensive for people in the younger age brackets and you may also get a lot of coverage in return.
- Term insurance is the only form of life insurance.
Term insurance is just one of many products available to protect against the risk of untimely death. Life insurance companies offer a variety of products such as traditional savings, unit-linked, and pension products.
- I am ineligible to obtain insurance because I am too old or have a pre-existing condition.
Insurance premium prices will need to be adjusted to reflect the higher risk when dealing with ages and medical problems that fall outside the median. However, that does not deprive you of purchasing life insurance.
- Other investments will provide me with higher returns than life insurance.
Some life insurance policies include an investment-like cash value feature that earns interest over time. They’re frequently marketed as a smart way to get life insurance while also saving for retirement.
- ULIP is not a good investment due to the high costs.
The long-term benefits of ULIPs include both protection and wealth building. Modern ULIPs have very minimal fees, and some of them even reimburse mortality or other deductions made during the policy’s term when it matures.
- The policy can only be in the name of the person who purchases it.
Anyone over 18 who has a regular source of income and is not a minor can purchase a policy in their name or the names of their spouse or children. Some insurance companies provide a joint insurance policy that covers spouses under a single policy.
- Claim settlement is a hassle, and the insurance company may deny or withhold a portion of the payout.
A payout will be processed if a valid claim is submitted. Furthermore, the premiums must be paid regularly for the policy to remain valid. Insurers are constantly implementing digitization in all of their processes, including the claims process, to make it more efficient.
Insurance is an important investment, don’t let these common myths convince you otherwise. Every family and individual has unique financial requirements. What works for one person may not work for another. Contact us to consult with one of our expert insurance advisors at Abbate Insurance Associates Inc. today to find the best plan for you and your family.