Life insurance is essential and must be a portion of every individual’s financial planning but one needs to demystify various age-old myths to buy adequate life coverage. Have at the top 10 popular myths associated with life insurance.
Life Insurance Is For Older People:
Young adults live with the idea that they may require a life insurance policy in the middle age or after 40 only. The tragic fact of our life is death; it is the ultimate reality of life and can happen to anyone irrespective of age, caste, creed or gender. The earlier one gets a life insurance cover the better because it increases the overall protective range for the individual and becomes the candle in a dark tower.
I Am Single, So I Do Not Need Life Insurance:
A schoolchild or a graduate have no family or still dependant on their parents may not want to consider life insurance policy. Life insurance policies usually expire at the age of 60-65 years offering substantial returns to the insurer at their retirement period. For a large number of people, life begins at the age of 60 with increasing life expectancy. Investing in life insurance can mean an added financial cushion for retirement years, which saves from tax burden during the working years.
Life Insurance Is A Tax Saving Instrument:
Many people buy life insurance simply as a tax saving instrument. While it is true that life insurance offers tax benefits under section 80c of the Income Tax Act, the sole purpose of life insurance is to act as a shield and cover in case of peril. Tax incentives and investment returns provided by the policies of life insurance is considered as an additional benefit, while one should also consider the cover, returns and other factors attached with it.
Company’s Group Insurance Is Good Enough:
Many earning individuals do not look beyond the group insurance provided to them by their employer. Group insurance is good only as long as the individual is working with the company. In case of a change of job or a layoff notice, the individual is in destitute without any life insurance. Along with that, an earning individual plans to leave the job for new venture in his mid-age, so taking a life insurance in the 40’s can be quite expensive.
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