Busting 6 Myths About Term Life Insurance

Myth 1: "Term Insurance is Expensive"

Misconception: Many believe term insurance comes with high premiums, making it unaffordable.

Reality:

• Term insurance is one of the most cost-effective life insurance options, offering pure protection without an investment component.

• Compared to other policies, premiums are significantly lower, ensuring maximum coverage at a minimal cost.

• Example: An 18-year-old non-smoker can secure a ₹1 crore term plan for as low as ₹487 per month. Plus, the premium remains fixed for the entire policy term.

You can calculate the premiums of your Term Life Insurance policy using the Term Insurance Calculator and choose a plan that best suits your requirements.

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₹1
Crore

Life Cover

@ Starting from ₹ 16/day⁺

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₹50
LAKH

Life Cover

@ Starting from ₹ 8/day⁺

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₹75
LAKH

Life Cover

@ Starting from ₹ 12/day⁺

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Myth 2: "I Don't Need Term Insurance Because I'm Young"

Misconception: Young individuals assume they don't need insurance since they are healthy and have no dependents.

Reality:

• The best time to buy term insurance is early in life, as premiums increase with age.

• Life is unpredictable—having coverage ensures financial security for your loved ones in case of unexpected events.

• Buying early means locking in a lower premium for the long term, making it an intelligent financial decision.

Myth 3: "I’ll Get My Money Back at the End of the Term"

Misconception: Some believe that term insurance functions like an endowment plan, offering maturity benefits.

Reality:

• Term insurance is a pure risk cover, meaning there is no savings or investment component.

• If the policyholder survives the term, there are no maturity benefits—only financial protection for dependents.

• If you want a premium refund, you can opt for a more expensive Term Return of Premium (TROP) plan.

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Myth 4: "All Insurance Policies Are the Same"

Misconception: Many assume term insurance is similar to other life insurance policies like ULIPs or endowment plans.

Reality:

• Term Insurance: Provides a high sum assured for a low premium, focusing purely on financial protection.

• Endowment Plans & ULIPs: Combine insurance with investment, increasing premiums.

• If you're looking for maximum coverage at an affordable cost, term insurance is the best choice.

Myth 5: "Claim Settlement is Complicated"

Misconception: People worry that making a claim is lengthy and difficult.

Reality:

• Reputed insurers have high claim settlement ratios (95%+), ensuring smooth processing.

• Many insurers provide online claim submission and tracking for faster resolution.

• If you purchase through platforms like Policybazaar, you get a dedicated relationship manager to assist with claims.

Myth 6: "I Can't Buy Term Insurance After a Certain Age"

Misconception: People think there's an age limit beyond which they cannot buy term insurance.

Reality:

• Most insurers offer term insurance for individuals between 18 and 65 years.

• While premiums are lower when purchased early, you can still buy term insurance in your 50s or 60s.

• It's never too late to secure your family's financial future.

Key Benefits of Term Insurance

Below are some of the benefits of Term Insurance. Have a look:

• Affordable Premiums: Provides high coverage at low costs, especially for younger individuals.

• Comprehensive Coverage: You can opt for a ₹1 crore sum assured at an economical premium.

• Customizable Plans: Add-on riders such as critical illness cover or accidental death benefits enhance protection.

• Peace of Mind: Ensures your loved ones are financially secure, even in your absence.

Summing It Up

Term insurance is a must-have financial tool that ensures your family’s financial well-being. By understanding the realities behind these myths, you can make an informed decision about safeguarding your future. The earlier you buy, the better rates you secure. Don’t wait—compare plans online and get insured today!

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