At the start of your career, you may find it difficult to have a sufficient income. With new commitments, such as buying your home or starting a family, you also need to ensure the well-being of your loved ones. An important consideration is to ensure the financial stability of your family in case of your sudden demise or accidental disability.
One way to financially secure your loved ones is to avail of insurance coverage. This ensures your family is able to sustain their lifestyle without any financial constraints.
Unfortunately, insurance penetration in India is low. Several myths about life insurance prevent young families from opting for such policies. Here are three common myths about life insurance plans.
- I only need life insurance if I’m the primary breadwinner in my family
Although you may not be the primary earning member, your family relies on your income for their living. Even if you do not bring home the highest income, the loss of your earnings in case of your demise or disability will hurt their lifestyle. Financial protection against such loss with an insurance policy is advisable. If you are a stay-at-home parent, you need to remember that your role in running the house is integral. You take care of several tasks, such as household chores, cooking, childcare, and much more. In the case of your demise, your family would need to shoulder these responsibilities or hire people to do these tasks. Such services are expensive and having life insurance will help meet these huge costs.
- If I buy a term life insurance policy and find that I still need protection when the term ends, I can renew the policy
Many young families opt for term plans due to its affordability. Quite often, these policies provide higher coverage at lower costs making these popular. Insurance coverage under these policies is available for the specified tenure. Such plans may be beneficial if you need to meet certain responsibilities like a home loan or children education that end after a certain period. However, you may require insurance even after the mortgage is repaid and children complete their education. Financial stability for your spouse in your absence is necessary. A life insurance policy is beneficial in meeting this requirement. Purchasing a policy at a younger age reduces the premium. Furthermore, renewing your policy at the end of the term may be expensive or even impossible due to poor health conditions at a higher age.
- I only need term life insurance
If you are a young family with a limited budget, purchasing a term plan may be beneficial. However, this is not the only type of insurance plan you would require. Traditional life plans offer death benefits as well as survival benefits. Certain types of policies, such as equity-linked savings scheme (ELSS) provide you growth through an investment option which could substitute other investment plans. Whole life insurance policies give you an opportunity to accumulate cash over the duration. To take advantage of these unique features, you may avail of a term plan for a higher sum assured. In addition to this, you may opt for a traditional life policy to maximize your benefits. Over the years, as your income increases, you may increase the coverage under traditional insurance policies.
Seeking guidance from insurance advisors may be beneficial. They will be able to assist you to find the most appropriate solution that suits your personal needs. If you do not have life coverage, it is recommended you get one today and secure the financial future of your family.