Debunking the three most prevalent myths around a life insurance!
Whether it’s from your colleagues at work or from a distant relative, you must have heard a lot about life insurance and what it does. As with any advice, it’s important to consider it closely before you base your decisions on them. And that’s what we’re here for!
Let’s debunk the three most common life insurance myths for you!
Myth Number 1: Policy premiums rise with age
It’s true that life insurance gets more and more expensive as you age - but that’s only because of inflation. There’s nothing inherent in the system of life insurance offerings which causes their prices to rise each year. So while you keep this in mind, it is important to know that you pay the same premiums for the entire duration of the policy when you buy life insurance. This is because instead of paying a low cost when your policy begins which keeps rising yearly; you’re paying the average for every year! So really, the situation couldn’t be better for you. This of course does not mean that if your purchase a policy at a later age altogether, the price won’t be higher than when you were younger. Mortality rate rises, so that will raise the premium bar for sure. But that too will be an average if the coming years of premiums you will be paying!
Myth Number 2: You don’t need life insurance if you don’t have kids
Life insurance is often mentioned when one is discussing families - it usually comes up in the context of protecting your family, looking out for their financial future, and such. This is understandable because you should really be looking to support your family whether or not you’re physically around them.
So maybe you think that this means you shouldn’t get life insurance if you’re single?
Not necessarily. As a single person, you should definitely consider getting a life insurance for two primary reasons:
The first reason is applicable for you if you have co-signed debts (for example, student loans) and do not want them to feel the burden when you’re not around. To get around this, you can buy a small policy, just enough to cover your debt.
The second reason is a simpler one - you want lesser rates! Life insurance rates keep increasing with time, and get frozen as soon as you purchase them. So why not get a life insurance early, when you won’t have to pay as much!
Myth Number 3: The life insurance my employer provides is enough
Your employer probably offers two types of insurance: life insurance and health insurance. While the latter might be enough - since after all it will impact just you - the former will certainly not be.
The life insurance offered to you might be a good addition to boast of, but in and of itself, it won’t do much. This is because your employer, in all likelihood, has an insurance coverage for you which probably goes as far as two years of salary. While this may not be a thing on its own, this is not an ideal situation for you, since you don’t get to choose your coverage amount. Moreover, this becomes important because your life insurance coverage also needs to account for the needs of your dependents.
It’s essential that you consider buying life insurance also because your insurance might also be linked with your employment. So, in the unfortunate scenario in which you lose your job - you’ll sadly lose your insurance coverage as well. If you wait for this scenario to arise, then the chances are that you’ll be much older than you are right now.. And we’ve already gone over what will happen to the insurance premiums you pay in the future, haven’t we?
However, a situation could also arise in which you might be able to take your employer’s policy with you and turn it to an individual policy. In this scenario, the premium rate will be the same as the rate of the entire group of your former office. This can be an ideal scenario - because this rate will likely be much lesser than if you were to buy a policy on your own. So make sure you find out if you have this option available!
Now that these myths are debunked…
We hope you have a better understanding of life insurance as a concept, a reality, and ultimately a practice which you must inculcate in yourself. It’s not enough simply to rely on your employer for your life insurance requirements since in the longer run, they may prove to be inadequate. In addition to all this, if you haven’t already bought your life insurance, we suggest you go buy your life insurance today, now that you’ve read this article!
AN Oct 32/18