Gone are the days when term insurance was synonymous to pure life insurance. Insurance companies in India have enhanced term policies and are offering more than just a backup plan for your nominees. However, not many know about the different types of term plans and their benefits and end up believing these myths.
Level Term insurance is not worth itLevel term insurance is the traditional life insurance where your nominees get financial assistance only in the event of your death. Many people get repulsed with level term insurance because it doesn’t pay after the maturation and does not have any riders to cover against medical care costs.
However, they turn a blind eye to the most important benefit provided by level term insurance which is high cover at low premiums. Not only does it give you higher cover but also has a much wider scope to cover the costs of your dependents.
All term insurance policies come without claimsThis myth is far from the truth. The TROP plan (Return of Premium) pays out the claims after the maturation of the policy and when the policyholder survives the policy tenure. There is no interest paid on the premiums, and only the total amount of the premium paid is returned to the policyholder.
Not for young peopleThere are several reasons why young people must get insured with term plans. One of the reasons to get term insurance is for borrowing loans. Life insurance secures your loved ones against your debts as well. Another reason is higher coverage offered by term plans. The first few years in the job market are not necessarily the best earning years. Hence, an insurance plan that gives you higher coverage at minimal premiums is an opportunity that must not be missed.
Term insurance is inflexibleWith convertible plans, insurers in India have made term insurance completely flexible. You can either choose to convert your term plan into another type of insurance such as an endowment, or you can increase your term plan cover annually.
Term insurance is a pure life insuranceTerm insurance plans are not just security anymore for your dependents. With riders such as insurance against critical illnesses or disability; you can enhance your term insurance to take care of other unforeseen circumstances as well.
Don’t dwell on these myths. Get a suitable term plan for a secure future. After all, an insured life is way more joyful than staying in constant fear of volatility of life.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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