Term life insurance is one of the simplest and prominent forms of life insurance policies out there. While it has been gaining tremendous popularity, there continue to be a lot of misconceptions associated with term life insurance. In this blog, we are busting some of the common myths associated with the term insurance plan .
- Term Insurance Plan Are Restricted to Merely Death Benefits
Often people think that term life insurance is not a proper investment as it does not offer a lump sum amount at the end of the tenure like other life insurance products. But the truth is that it is an excellent form of investment. Ever thought what will happen to your family in case you meet with an untimely death. This is where the term plan of insurance plays a pivotal role. If you have correctly calculated the coverage, the money you get from the plan will pay your family so that they do not have to struggle financially after your demise.
- Single People Don’t Need Term Plan.
Term insurance plan is often considered as a plan that you invest at a later stage in life; when you have a family to take care of. The earlier you take insurance, the better it will be for your future financial stability. For instance, if you have a car loan, student loan or home loan, you would not expect your family to take care of such liabilities after your demise. Moreover, if your family is dependent on you, then they will have a hard time paying for the expenses after your untimely demise.
- Term Insurance Plans Often Get Rejected
One of the main misconceptions associated with term life insurance plans is that most of the time, the claims do not get approved. According to the recently released annual report of IRDA, the average death claim settlement ratio of insurance providers stands around 85.5% to 99.07%. This implies that out of 100 policies, merely 15 got rejected for the claim.
- All Term Plan Products Are Same
There is a common notion that all products of a term insurance plan come with one feature. In the case the insured individuals die during the tenure of the policy, the company will ensure money to the family. People believe that this is with term plans, and there is no scope of customization.
In the fiercely competitive landscape, insurance providers cannot survive with the same product package. Similar is the case with a term insurance plan. Insurance companies have come with tons of rider options that allow you to add additional benefits cover for more comprehensive and customized coverage.
- It Is A Lengthy Process
People often think that buying a term insurance plan is an arduous process. It needs you to fill up different forms and submit all sorts of different documents. Considering that the life insurance plan is available online, purchasing this policy within a couple of clicks.
A term life insurance is primarily a pure life cover that offers comprehensive coverage for low premiums. It is one of the simplest ways to protect your family financially.