Although term insurance plans have been in the market for a long time, many of you might still be unaware of its features and benefits. Due to the lack of awareness, term insurance plans remain the most under-rated life insurance product irrespective of having many benefits. According to a report, only 5% of the Indians purchase a term insurance plan.
The prime reason for the low penetration of term insurance in India is the lack of awareness as well as wrong notions about the policy. Although a term plan is an essential part of life insurance, many of you might still not purchase it. Therefore, let’s first try to understand what term insurance is in detail for better clarity:
As the name suggests, a term plan can offer coverage for a specific period. Since it is a protection plan, the main objective of term insurance is to provide financial security to your loved ones. Hence, when you purchase a term insurance policy, you should include the names of your nominees. If anything happens to you in the future, your nominees can receive the payout to safeguard their future.
A term insurance plan has been the least bought plan in the market. Moreover, the on-going myths and rumours about term insurance plan can make the plan the least popular choice. Therefore, if you want to purchase term insurance to reap its benefits, you should first bust all the myths and perceptions about it. Let’s go through the top five things about term insurance plans that aren’t true:
- It offers only death benefits
There was a time when term insurance plans would only offer death benefits to your nominees in your absence. With the introduction of smart term plans, it is no longer the case since you can receive death benefits as well as survival benefits together. A smart term plan usually returns the whole premium amount, which acts as the survival benefit, at the end of the maturity period. So stop worrying about the money you would have to pay in the form of premium. Just invest and reap the benefits if you live the term as well.
- It cannot cover your partner
Many term insurance plans can give you the opportunity to cover your spouse jointly under the same policy. When you include your spouse under your term policy, you wouldn’t have to worry about their financial stability in the future. With guaranteed life coverage, your spouse can meet their financial requirements after your demise.
- It allows a fixed coverage
The term coverage can be a pre-decided value at the initial stage of the purchase. However, many insurance providers can allow you to increase the coverage value after you cross specific milestones such as getting married, having kids, reaching retirement, and so on. Increasing the term coverage can also help you to be adequately insured for any announced emergency like loss of income or job, physical disability, critical illness, and so on.
- It is a lengthy process
Due to the advent of technology, purchasing term insurance can no longer be complex. Many insurance companies have availed term insurance plans on their online websites today. As a policyholder, you can buy an online term policy in a single click from any corner of the world. If you want to opt for online term insurance, you should follow the three main steps given below:
- Select a term policy.
- Make an online premium payment.
- Purchase the term policy online.
- It is expensive
With the introduction of online plans, you can purchase a term policy at an affordable rate. Moreover, online term plans might not involve the third-party or an insurance agent; hence the commission charge might be nil. Hence, a term policy, which is purchased online, can be relatively cheaper than offline plans. Moreover, there are other ways to ensure you purchase a term policy at an affordable rate, which is as follows:
- A term policy purchased at a young age can be cheap since you might be physically fit.
- Calculate the premium using a term insurance calculator for determining the premium amount.
As highlighted above, you might come across several myths about term insurance plans, other than these five mentioned above. However, the myths can only make sure that you don’t get to reap the term insurance benefits, which can secure your future financially. Apart from financial security, a term plan can allow you to reduce your tax liability, meet your routine needs, incorporate additional riders, and so on. Therefore, don’t be lost in the pool of myths, conduct background research, select a credible company, consult a professional, and choose the right term policy for you.