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Term life Insurance Myths Debunked
Term life insurance is a simple product to understand. It has host of benefits if chosen carefully. However many of us simply let go off the term insurance plan and do not prefer to have it due to some of the myths associated with it.
Whether you buy term plan, investment plan or pension plan, you need to consider each and every element of the plan. Each kind of plan is designed keeping the varying needs of the consumer. Do not believe on the myths associated with them instead find the truth yourself.
Myth- I do not need term insurance at such a young age
Fact- Once you have started earning, it is the best time to buy Best Term Life Insurance. Reason being the life is uncertain and the younger you are the lower are your premium rates. If you buy term insurance when you are older, the premium rates will increase accordingly.
Myth- Term insurance does not provide any investment option and hence it is useless
Fact- Term plans have been designed keeping various needs of various kinds of consumers. It does not provide any investment option because it is pure risk-coverage plan. No-investment option makes the plan affordable
Myth- Buying term plan is waste of funds
Fact- Term plans are the cheapest of all the insurance plans. Though it does not provide any ROI but it does provide you opportunity to save and invest in instruments offering decent or higher ROI.
Myth- Return-of-premium term plan is better
Fact- Term plans have been designed so that people with lower affordability can avail insurance. Return-of-premium option takes the premium on the higher side, which defeats the purpose of having term plan.
Myth- Pension plan is better than term plan
Fact- Pension or term, both have their own negatives and positives. The point to be noted is- term plan provides benefits after the death while actual purpose of having Retirement Pension Plan is to attain financial security when one is alive during old age. So, both the products cannot be compared. It is the need of the individual and the kind of security he is looking for, which determines the kind of plan he should buy.
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