4 Common Misconceptions About Term Insurance Plans

 


Term plans are a budget-friendly way of getting life insurance coverage. Unfortunately, there are many misconceptions that often interfere with you getting the coverage you need and deserve. Today, we aim to shed some light by demystifying a few misconceptions on term insurance. Let’s get started –

Misconception 1 - Term life insurance doesn’t offer coverage as valuable as whole life insurance

This is, perhaps, one of the biggest misconceptions that most people have about term plans. Now, term life insurance and whole life insurance each come with their own unique benefits. The biggest differences between these two forms of coverage are as follows:

·     Term plans cover you for a fixed period whereas whole life insurance covers you for life

·     Whole life insurance plans accumulate cash value whereas term plans do not

Now, these differences are by no means drawbacks of term insurance. The trick to getting the most value out of term plans is to take this form of insurance to cover specific milestones in life, such as your child’s university 15 years down the line or your home mortgage.


Misconception 2 - Term insurance plans are limited in their benefits

Term life insurance plans cover you against death, terminal illness, and total permanent disability for the period selected by you. You can opt to further enhance the coverage of your term plan or customise it by including riders. For instance, you may want to opt for riders that cover critical illnesses, certain invasive medical procedures, and some diseases. You can also consider riders that waive your premiums for a certain number of years if you face early/intermediate stage medical conditions. It’s all about knowing what your needs are and how the features of the plan can be customised to meet your requirements.  


Misconception 3 - One should only buy term insurance later in life

Many people feel that they do not need to buy term life insurance early on as the coverage expires after a pre-selected period. However, one can never be sure when the protection of life insurance can prove handy. Life is quite unpredictable and as such, we need to be prepared and keep our loved ones secured. Even if you do not have any dependents yet, you might still want to prepare for the future by buying term life insurance early on. The premiums will most likely be cheaper too!

Misconception 4 -Terms plans are a waste as there is no cash value

While it is true that term life insurance products do not come with a cash value, these plans are certainly not a waste. As stated in point number 2, they provide you with coverage against death, terminal illness, and total permanent disability. All of this comes at budget-friendly premiums. If the heavier premiums of whole life insurance seem daunting, you might want to opt for a term plan instead.

 

With these myths out of the way, do go ahead and get the coverage you need with a clear mind. You can speak to your insurance provider for more details about the specific coverage of their term plans. The best life insurance companies in the country have their own financial consultants who can guide you in choosing the right coverage. All the best!

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