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Don’t Fall For These Life Insurance Myths

Published On Apr 27, 2021, Updated On Apr 27, 2021

Life insurance is one of the finest and the most secure ways to protect family members against uncertainties of life. This financial tool offers tremendous benefits for self and dependents, but it is not devoid of myths and misconceptions. The most common myth is that life insurance is just a tool for tax saving. This is not true that there are definite advantages of securing a viable life insurance policy. 

Myths and Facts About Life Insurance Policy

Life insurance policies offer several perks for the insured and many misconceptions are surrounding it as well. One must educate themselves regarding the truth surrounding policies, to make a wise decision and extract true benefits from an insurance plan. The common myths and facts about life insurance policy are as follows.

1. Life Insurance is Not Just a Tax Saving Tool

Generally, policyholders adopt insurance policies and consider this merely as a tax-saving tool. But this is not true, but the primary objective of the life insurance policy is to render financial safety to the insured and his or her family. Tax saving is only an added benefit that comes with the other benefits of the plan.

2. The Benefits of the Life Insurance Comes Only After the Death of the Insured

There is a common myth that the benefits of the insurance plan will be realized only after the death of the insured. But this is not completely true and the life insurance aims to offer financial aid to the beneficiary in case the insured suffers any eventuality. There are two types of life insurance policies, namely pure life insurance and policies with investment opportunities to meet the financial goals of people. These plans offer pensions, bonuses, and income when the person is still alive and are more than mere death cover. 

3. Only the Breadwinner of the Family Requires Insurance

This is the biggest myth regarding life insurance. Even the stay at home parent requires life insurance and will escalate the financial security of the family to many folds. The work profile changes can alter the insurance needs of the individual but do not eliminate them.

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4. Insurance Offered by the Employer Alone is Enough

One of the benefits that people receive from their employer is group life insurance. But this is alone not enough to meet the insurance needs as the coverage offered in these group life insurance will be very less. Also, the insurance policy will become volatile, if one loses or leaves the job. As the workplace policy doesn’t stay forever, a personal policy is the best way to offer the required financial stability for the family.

5. It Is Better to Invest Money in Other Options Rather Than to Buy Insurance

Insurance policies cannot be compared with other investment options as both of them are two distinct entities. The ultimate aim of a life insurance plan is to keep the family members financially sound in their absence, which is not available with any other investment options. Also, life insurance is less risky than other investment options.

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Bottom Line

People should not ignore life insurance, owing to the myths associated with them. It is important to check facts and make informed and intelligent decisions after performing pertinent research. 

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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