4 Myths Of Term Plans That Aren’t True!

A term insurance plan is the simplest yet most effective form of life insurance. It is the most economical way to get a great life cover, but still most people give it a pass and opt for more expensive life insurance plans.

This is because there are certain myths that surround term insurance plans. And these myths steer potential insurance customers away from these kinds of plans.

This article will look at 4 of these myths and explain why they are far from truth!

Myth 1: Term Plans Don’t Provide Returns and Hence They’re Worthless.

One can easily add a rider to his or her term plan and avail the ‘return of premium’ if he or she outlives the tenure of the plan. Let’s say you don’t opt for the ‘return of premium’ rider, even then these plans are worth every penny. Let’s draw a parallel between motor insurance and term insurance.

With motor insurance you pay a yearly premium, but only receive any benefits when you meet with an accident or your vehicle is completely lost due to theft, fire or natural calamities. But all of us still buy motor insurance, year after year, without fail!

You may say that this is because it is compulsory to buy insurance by law, but you are only required to own a third party insurance, but most of us have comprehensive motor insurance, even when it doesn’t have any payout at the end of the year.

Term insurance policies work exactly the same; you pay premiums in order to get a payout in the case of any dire event. That’s not all, the amount you pay as premium is next to nothing and in exchange your beneficiaries stand to receive a substantial amount of money.

Term plans aren’t worthless; rather they secure the future of your loved ones and protect them from the uncertainties of life. Weigh these two factors against the cost of term policies and you’ll see they’re worth every single rupee you pay.

So, to conclude, term plans are definitely worth your money, and in case you want your money back if you outlive the tenure, simply opt for the ‘return of premium’ rider!

Myth 2: Buying A Term Plan When You’re Too Young Or Too Old Is Not Beneficial.

This is again so far from the truth! When you are young you can get term insurance plans for very, very low premiums and still get a great coverage amount. You can also opt for ‘return of premium’ rider so when you outlive the tenure of the policy you can get your money back.

So buying a term policy when you’re young is indeed beneficial! When you’re older, say when you’re 40, you might think it’s too late to go in for a term insurance plan, but this is again not true. Going in for term insurance at this age will mean you might have to pay a little more, say somewhere between 10 and 12 thousand.

But in exchange, in the case of a dire event, your family members stand to receive a considerable amount of money that will cushion the financial impact of your demise.

Myth 3: The cover of a term plan cannot be increased.

Again not true! Any leading insurance firm will offer you the option of increasing the cover of your plan. Say you take out a term plan at 25, at this point in your life, your lifestyle is quite basic and you might not have dependents.

But when you reach the age of 30, your lifestyle is bound to improve and you might have children, at this point, you can increase the cover of your plan with complete ease.

It might cost you a little more, but when you think of the increased coverage and compare it with other life insurance policies out there, you will find that not many other insurance policies provide the same coverage for such low premiums.

Myth 4: Purchasing a term plan online is complicated.

It’s very much the opposite. Buying a term insurance policy is so convenient online! You don’t have to move out of the comfort of your home, you are provided with all documents and you can purchase a plan at discounted prices.

You can even pay your premiums online. Since you fill out the paperwork yourself, the chance of error is also less. It’s also very transparent, everything is provided to you, all the terms and conditions; you can purchase only once you’re satisfied with and agree to the terms.

There you have it! Four of the most popular myths regarding terms plans busted! We hope you give some thought towards buying a term insurance plan!

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