Make Sure You Are Not Falling For These Myths about Term Insurance

Term Insurance MythsDid you know that India has the biggest life insurance sector in the world? According to India Brand Equity Foundation, the growth trajectory is slated to rise at a lightning speed over the next decade, with promising estimations of life insurance policies crossing the $160 billion mark! As the market grows, so do the consumers, but there are still certain myths associated with buying term insurance plans in India. Here's a look at some of the common ones.

Common Myths Debunked

Term policies are complicated: On the contrary, term insurance plans are very simple to understand, since they are not a part of what is called a cash value plan. This entails no complications related to keeping track of how much money goes into risk coverage, how much into policy loan repayment and how much gets invested back for creating a savings pool. You just need to know the period for which you want to get cover and pay the premium accordingly. This is why you can even buy term insurance online very easily.

I'm young and healthy; I don't need an insurance plan: In case you have any debts, like a car loan or home loan riding on your back, it is advisable to have a term insurance plan. By covering your life, term insurance helps by creating a corpus ready in case of any accident or premature death. It will enable your nominee to pay off your debts easily.

Term plans are expensive: Since the concept of these plans remains essentially similar for different insurance companies, they become easy to compare. This feature drives competitive pricing of various policies and therefore compared to cash value plans, these are cheaper. Moreover, now with the availability of online term insurance plans, the agent's commission is also removed from the equation and customers can get even better deals.

Term insurance is only meant for death coverage: This is not true. In fact, majority of companies offer additional riders that you can choose to customise a plan best suited for you. There are various additional benefit covers to choose from, such as disability, accident or critical illness. One can also choose a return of premium term plan, which ensures that you get back all the premiums you paid, in case you outlive the policy tenure.

Online term policy will not give me claim settlement: If you fill all the information correctly, pay the premium on time, check details for extra riders you might need and get a medical checkup done, there is no reason that the company won't settle your claim. Just make sure to check the claim settlement ratio of the company to get an idea about its background. For instance, Bharti AXA provides easy steps to claim and track settlements online, reducing the customer burden.