Choosing a life insurance policy is confusing – I agree, but you may not get a second chance to make the right decision. Thus steer clear of these myths and misconceptions.
Myth 1: Let me buy every type of insurance and I am risk free.
Do not be of the view that insurance should be bought and used for every accident and disaster. It’s just not necessary to buy every type of insurance policy. Sometimes the risk is worth taking rather than paying the insurance premiums. Why pay extra for an insurance policy with a low deductible, just so you can get your insurance company to cover a cost you could readily handle on your own?
Myth 2: Being the only breadwinner, I need a life insurance.
It is important to buy a life insurance policy for everyone in the household if the absence of their income would cause a financial hardship. Even if your spouse is non-working still he/or she contribute in housekeeping, food preparation, home accountant, and school transportation.Thus this makes it necessary to buy a life insurance policy for you spouse too as your spouse really contributes to the household budget.
Myth 3: I am alive, that’s why I need a life insurance
Life insurance is practically a risk management that takes care of the dependants after the death of the caretaker. But if you are single or retired you may not have any dependants after you. Thus buying a life insurance may be beneficial in as a life critical illness cover but is usually unnecessary.
Myth 4: Whole or universal life insurance are the best choices.
In my opinion, term life insurance is the best one to consider as it is set for a specific term, like 10-30 years, with a much lower premium than whole and universal life.
Myth 5: Your benefits should roughly equal the premiums you've paid,
Many people are of the view – why pay premiums for years and if we will never make a claim. An insurance policy should be taken as a protection against true financial catastrophe, not as a buffer against the normal ups and downs of daily living