Bust The Myths Keeping You From Buying A Term Plan

A term plan has many known benefits for its takers, even so, there are many term plan myths surrounding it. Today, we are going to break some of the myths you might have heard of and expose the facts, to help you make a wise and well thought of decision.

Myth: “Life Cover should be equal to my current annual income”

The main purpose of a term plan is to cover your family’s finances if something were to happen to you. In that case, if your cover amount is as much as your yearly income, it will only be able to sustain your family comfortably for a year, after which they will be forced to make cuts in their lifestyle. Therefore, essentially your cover amount should be no less than 10 times your annual income. You can also assess what your ideal cover should be by calculating your Human Life Value (HLV).

Myth: “My assets will cover my family, I don’t need a term plan”

Unless most of your wealth is kept in a savings account, your assets may not be helpful to your family immediately after you are gone. Assets like gold, property, stocks, fixed deposits etc. do not have the necessary liquidity required in times of need. In such cases, a term plan proves highly beneficial.

Myth: “An insurance plan that doesn’t give returns has no value”

A term plan provides you with a high life coverage at a very nominal cost. It provides your family with an umbrella of security at very low premium rates, and you can also avail the benefit of premium returns when the insured person opts for a rider benefit. Therefore, as far as value goes, a term plan has plenty of it.

Myth: “I cannot increase the cover of a term plan”

This here happens to be one of the biggest myths surrounding term plans. As you age, your responsibilities may change and the number of people dependent on you may also increase along with your income. In such a scenario, you can increase the cover provided by your term plan at an additional cost, and need not opt to buy a new term plan altogether.

Myth: “It is difficult to buy term plans online”

A lot of people have a misconception that buying a term plan online is complicated and unsafe, however, that is far from the fact. Purchasing a term plan online is super easy and completely hassle free; A few clicks is all it takes. What’s more, you also save precious time and money when buying a policy online.

From the above myth busters, it’s clear that buying a term plan has many benefits, low premiums to name one. So, go ahead and get a term plan that best suits yours and your family’s needs.